Food inflation drops to three-year low as price of vegetables and fish falls

By Angela Monaghan, Economics Reporter Published: 6:45AM GMT 03 March 2010

Comments 3 |

Stephen Robertson, executive ubiquitous of the BRC, pronounced reduce food acceleration was "great news" for business Photo: PA

The tumble in food inflation, from 2.9pc in January, was driven by 0.3pc deflation in uninformed food, as the cost of vegetables and fish fell.

It was the initial time that any piece of the food difficulty had depressed in to deflation given the array began in Dec 2006, the BRC and Nielsen said.

Recession fears ease as services expands

The inform pronounced that foe inside of the grocery marketplace was keeping prices down, and that most of the debasement of the bruise - that pushes up the cost of imports - had already been engrossed in to prices. It additionally compared with a high uninformed food acceleration rate of 10.2pc in Feb 2009.

Stephen Robertson, executive ubiquitous of the BRC, pronounced reduce food acceleration was "great news" for customers. "Previous falls in the worth of the bruise and large commodity cost increases, that were pulling up food prices, have right away mostly worked through. Barring any lasting shocks, the cost of food should go on to be comparatively fast for a little time," he said.

Overall, annual emporium cost acceleration fell to 1.7pc in Feb from 2.3pc in January. Non-food acceleration was unvaried at 1.9pc, that done Feb the initial month that food acceleration was reduce than non-food inflation. Included inside of the non-food difficulty was DIY, gardening and hardware acceleration at 7.6pc, and electrical products acceleration at -2.5pc.

"The VAT enlarge is putting vigour on altogether emporium cost acceleration but, even so, electricals, home party and wardrobe are essentially cheaper than they were this time last year. Fierce sell foe is safeguarding business and keeping acceleration down," pronounced Mr Robertson.

A apart inform from Kantar Worldpanel showed Tesco"s share of the grocery marketplace increasing to 30.4pc from 30.1pc over the twelve weeks to Feb 21, compared with a year earlier. Asda was in second place but the share fell to 17pc from 17.2pc.

The inform pronounced Tesco had reaped the rewards of the inhabitant Clubcard debate and stand in points scheme.

"The post-Christmas duration is traditionally characterised by cost wars but this year we"re saying a step-up in selling activities such as faithfulness schemes and coupons to capture consumers" share of wallet," pronounced Ed Garner of Kantar Worldpanel.

"Tesco has positively incited up the feverishness for Asda this month but the conflict is by no equates to over. Asda has reacted strongly with a vital banking intrigue of the own and we design to see the stroke of this ultimate consumer assault in subsequent month"s figures," he added.

Sainsbury"s marketplace share grew for the 12th unbroken month, to 16.3pc from 16.2pc. The inform pronounced Morrisons had been increased by the store merger following the Co-operative"s acclimatization of Somerfield. Morrisons" share rose to 12.3pc from 11.7pc.