Food price inflation falls further

Food price inflation fell again last month, to its lowest level since May 2008, the latest British Retail Consortium-Nielsen Shop Price Index has revealed.

Annual food price inflation was 6.2% in December, down from 7.1% in November. Fresh food inflation fell to 6.8% (7.2% in November) and ambient fell to 5.2% (6.8% in November).

The BRC expects food inflation to continue falling in 2009 as operating costs, particularly energy, fall further and savings are passed on to consumers. Also, as the recession deepens, the high levels of promotions will continue as competition in the grocery industry intensifies, it said.