Shop price inflation rate drops to lowest point since May 2022 as tea-drinkers savour lower prices

Customers are benefits from slowing shop price inflation after it was announced that it has fallen to its lowest rate since May 2022.

Heavy discounts and offers offered by retailers are said to have cut shop price inflation from 4.3% in December to 2.9%, according to the British Retail Consortium (BRC)-NielsenIQ Shop Price Index. This means that prices compared to January 2023 are 2.9%.

Non-food items saw inflation fall to 1.3%, the lowest rate since February 2022. This was also down from December's rate of 3.1%.

Food items slowed to a rate of 6.1%, down from December's 6.7%. This marked the ninth consecutive fall for food inflation and the lowest the rate has been since June 2022.

It was good news for tea-drinkers, as the BCR said that the price of tea bags and milk was falling. However, for alcohol drinkers, prices remained higher due to increased duties on many products.

BRC chief executive Helen Dickinson said: “Some new year cheer as January shop price inflation slid to its lowest level since May 2022. Non-food goods drove the fall, as many retailers offered heavily discounted goods in their January sales to entice consumer spend amidst weak demand. Rising geopolitical tensions will also add to uncertainty and costs in supply chains.”

Mike Watkins, head of retailer and business insight at NielsenIQ, added: “Shoppers are seeing savings at the checkout, with non-food retailers on promotion and food retailers continuing to reduce prices when the costs of goods fall. However, consumer demand remains fragile as most households are yet to feel better off after nearly two years of inflation.”