Food Inflation Eases In October Amid Intense Retail Competition

Annual food price inflation in the UK cooled to 3.7% in October, down from 4.2% in September, according to the latest data released by the British Retail Consortium (BRC) and research partner NielsenIQ.

While this marks a welcome deceleration, the picture remains mixed across food sub-categories. Fresh food inflation picked up to 4.3% in October (from 4.1% in September), indicating that produce and perishables continue to face upward pressure.

In contrast, ambient food inflation (covering packaged and shelf-stable goods) slowed significantly—falling to 2.9% in October from 4.2% in September.

Retail Context and Underlying Drivers

The easing in food inflation comes against a backdrop of fierce retail competition, widespread discounting and falling commodity input costs. Helen Dickinson, Chief Executive of the BRC, said: “Overall shop-price inflation slowed in October, driven by fierce competition amongst retailers and widespread discounting… Easing global sugar prices helped to bring down prices of chocolate and confectionery.”

This environment has given consumers a modest reprieve, though inflation remains firmly above the Bank of England’s long-term target and continues to bite into household budgets—particularly for fresh food.

Implications for the Fresh Produce Sector

For the fruit, vegetable and plant-and-flower wholesale sector (which the FPC serves), several implications stand out:

Fresh produce inflation remains elevated. The 4.3% annual increase means growers, packers and wholesalers cannot yet expect a return to pre-pressure levels; cost and pricing challenges remain.

Ambient category relief may benefit packaged lines. The strong drop in ambient food inflation suggests shelf-stable products may see less cost pressure, but fresh produce remains exposed.

Promotional strategies are playing a role. Retailers’ discounting and price-cut tactics may squeeze margins unless supply-chain partners manage costs accordingly.

Tax and cost burdens remain key watch-points. With the Autumn Budget upcoming, any further cost burdens imposed on the retail sector risk being passed through into food inflation—something industry groups continue to flag.

Outlook

While the decline in headline food inflation offers a glimmer of relief, the fresh-produce segment remains in a challenging spot.

The differential behaviour between ambient and fresh foods underscores the value of communicating both cost-control measures and value-proposition narratives for members of the sector.