Consumers shouldn’t be ‘misled’ by 12-month food inflation drop, say retail experts

While consumer food inflation has fallen for the 12th month in a row, retail experts say that consumers shouldn’t be led to believe this marks the end of the cost-of-living crisis.

The latest Consumer Price Inflation (CPI) figures from ONS show that the largest downward contribution came from food, with prices rising by less than a year ago.

Prices for food and non-alcoholic beverages rose by four per cent in the year to March 2024, down from five per cent in February - making it the lowest annual rate since November 2021. The March figures come after ONS recorded the highest annual rate in more than 45 years for the same period of 2023 at 19.2 per cent.

Claire Wallis, director of the consumer goods and retail team at consultancy BearingPoint said that while the current current rate of inflation has fallen to its lowest level in two and a half years across March, it does continue to remain higher over the longer-term picture and versus the Bank of England target of two per cent.

“Lowering of prices through into consumer food shopping and eating out is apparent too, but consumers should not be misled to believe we are heading towards the end of the cost-of-living crisis,” warned Wallis. “Prices continue to remain high with factors such as interest rates, high fuel pricing, supply chain stability and wage rate inflation all impacting cost of goods.”

Kris Hamer, director of insight at the British Retail Consortium, said that as some cost pressures in the supply chain begin to ease, retailers have worked hard to pass on savings where they can and are offering their customers the best value for money.

But BearingPoint's Claire Wallis said that while promises from grocery retailers to invest in prices are forthcoming, there are questions around whether these will be as fast as consumers are led to believe and on the lines that are core staples to most UK families.


Julian Krenge, chief technology officer at e-commerce software provider parcelLab - which has worked with H&M and New Look on their post-purchase customer experience - said that falling inflation presents an opportunity for the UK's online shopping markets. But he warned that consumers could remain cautious because of the cost-of-living crisis.

"We could see a shift towards discretionary purchases if confidence improves, but recent data suggests that frustrations around price, poor delivery experiences and high shipping costs persist," he continued.

Share Story:

Recent Stories

The Very Group
The Very Group transformed range and assortment planning using Board.

Watch the full video

Smarter merchandise planning across the retail value chain
In this webinar, Matt Hopkins, Head of Retail Solutions, Board, Catherine Tooke, SVP Product & Planning, Sweaty Betty, and Subir Gupta, Managing Principal, Thought Provoking Consulting join Retail Systems Editor Jonathan Easton to discuss the findings of the recent Retail Systems report The Merchandise Planning Challenge: How are retailers harnessing technology to optimise planning and retain customers? and examine the innovations that are improving retail planning.