Price pressure on retail shows signs of easing in April
INFLATION has dipped to its lowest rate in nearly three years, showing some promise for the months ahead in retail.
According to the latest figures from the Office for National Statistics (ONS) the CPIH UK inflation sat at just 3%. This made the annual rate to April 2024 the lowest that we have seen since September 2021, when this number sat at 2.9%.
This marked a fall of 0.8 percentage points from the year to March 2024 as a number of categories contributed to this overall fall.
One section plenty of consumers will be happy to see a continued fall in inflation for is the food and non-alcoholic beverages category which fell by 1.1% from the March figure to 2.9%, according to the ONS.
And, just in time for the summer parties in the months ahead, alcohol and tobacco products saw a considerable drop of 3.8% from March to 8%.
This also comes hand-in-hand with the latest grocery sales data from Kantar Worldpanel, which found that grocery price inflation had fallen for the 15th month in a row to sit at 2.4%, its lowest level since October 2021.
Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Grocery price inflation is gradually returning to what we would consider more normal levels.
“It’s now sitting only 0.8 percentage points higher than the 10-year average of 1.6% between 2012 and 2021, which is just before prices began to climb.”
Staggeringly, the UK also saw a massive drop in energy prices in the year to April, too. While the number reached eye-watering levels this time last year, many will be relieved to see a drop of 27.1% in the prices of electricity, gas and other fuels. ONS confirmed this was the largest drop on record for energy, with the records dating back to 1989.
With some cost pressures finally beginning to ease off for many, experts have indicated that now may be the time for businesses to seize this opportunity for growth and put into action plans that the cost-of-living crisis had put on hold.
Amy Knight, personal finance expert and small business commentator at NerdWallet UK, said: “With the price of energy, food and raw materials rising less steeply, small business owners may seize the opportunity to put plans to expand – which have been on pause – into action as we move into a friendlier economic environment.
“As supply-side pressures ease and the cost of energy and raw materials settles, business growth becomes a more realistic ambition.
“We could see the creation of new job roles that would contribute towards turning around UK unemployment figures, which have started to creep up.”
