Business

At last . . . a crumb of comfort for households as food inflation eases for second month running

Food inflation has eased for a second month as supermarkets like Sainsbury's cut the price of household staples, according to the BRC-NielsenIQ shop price index
Food inflation has eased for a second month as supermarkets like Sainsbury's cut the price of household staples, according to the BRC-NielsenIQ shop price index Food inflation has eased for a second month as supermarkets like Sainsbury's cut the price of household staples, according to the BRC-NielsenIQ shop price index

SOME of the economic gloom has eased at last for beleaguered Northern Ireland households with confirmation that food inflation has fallen for a second month running as supermarkets cut the price of kitchen cupboard staples.

The closely-monitored shop price index from the British Retail Consortium (BRC) shows that UK food inflation dipped to 14.6 per cent in June from May's 15.4 per cent mark, and is now below the three-month average of 15.2 per cent.

Overall shop price inflation also slowed to 8.4 per cent in June from 9 per cent in May and is below the three-month average of 8.7 per cent.

It comes as the UK's second biggest supermarket Sainsbury's confirmed it is setting aside £15 million to cut the price of grocery essentials from today in a move which may prompt others to follow.

Sainsbury's, which has 12 shops in Northern Ireland, will roll out reductions on own-brand items such as rice and pasta, and is also lowering prices on staples including cornflakes, jams and runny honey.

Neil Johnston, director of the NI Retail Consortium, described the easing of shop price inflation in June as "good news for consumers - although it is unlikely to feel that way."

He added: "It is proof that the best guarantee of value and choice is a competitive food market.

"Government suggestions of price controls are not the answer.

"Northern Ireland benefits greatly from being part of that highly efficient and, frankly, low margin, market.

"UK supermarkets only make about 3 per cent profit and in doing so deliver consumers some of the best prices in Europe."

BRC chief executive Helen Dickinson said if the current situation continues, food inflation should drop to single digits later this year.

But she cautioned: "It is imperative that government does not hamper this progress by introducing costly new policies.

"Reforms to the packaging levy and a new deposit return scheme could create an additional £4 billion burden on retailers and their customers.

"Along with a rise in business rates, and the introduction of border controls in October, these policies could hinder the Government's efforts to combat inflation."

Meanwhile soaring food prices have been having a detrimental impact on the mental health of shoppers and their families, according to a separate study by consumer group Which?.

It suggests the increased price of everyday groceries has worsened the mental health of a quarter of people.

Some 23 per cent say that rising food prices has hindered their ability to eat a healthy diet, while 22 per cent said they had lost sleep over food costs, and one in five said their physical health had deteriorated.

The findings come as MPs prepare to question senior figures from Sainsbury's, Morrisons, Tesco and Asda on food and fuel price inflation and whether consumers will soon see price falls.

Recent Which? research found that the cost of everyday family meals like pasta bake, fish fingers and chips and spaghetti bolognese had increased by up to 27 per cent over the last 12 months, with some essential ingredients doubling during this time.

Indeed the Bank of England suggested last week that some retailers are jacking up prices or failing to pass on lower costs to consumers as a way of increasing their profit margins at a time of stubborn inflation.

Despite the rising costs, a combination of bank holiday weekends and scorching weather helped to boost Northern Ireland grocery sales in recent weeks, according to new monthly data from analysts Kantar.

Shoppers here fired up the barbecues, spending an additional £2 million on chilled burgers, grills and sausages, £3.8m on cider and £9.3m on take-home soft drinks.

Kantar said the Northern Ireland grocery market saw sales grow by 8.5 per cent in the year to June 11, with shoppers spending an additional £308 year-on-year.

But with grocery inflation still so high, it means the average annual grocery bill is set to rise by £840 from £5,221 to £6,061.