Food prices returned to inflation in July for the first time this year driven in part by the rising cost of wheat, according to latest figures released by the British Retail Consortium. 

The BRC Nielsen Shop Price Index report showed food prices had risen year-on-year by 0.1%, up from the 0.4% decline in June 2015, although the overall shop prices index – which incorporates non-food categories – fell by 1.4% in July marking the 27th consecutive month of price drops.

Poor weather in the key growing regions of the US put pressure on wheat and corn prices, which rose 7% and 6% respectively in the 12 months to 10 July, the report said.

Inflation in ambient food rose to 1.2% from 0.6% in June – the highest rate since January 2014.

Helen Dickinson, BRC director general downplayed the return to rising prices and described them as a “short-term blip” in the longer term downward trend. “It is not very significant,” she said.

Mike Watkins, head of retailer and business insight at Nielsen claimed deflation in retailing had significantly influences sales over the last 12 months, as had ‘unpredictable weather, price cuts and short term promotions’.


“In food retailing, whilst ambient prices are becoming more stable, many fresh foods are again cheaper than this time last year and there have been some attractive sales and offers across non-food retailing in recent weeks. Shoppers are saving money which is helping consumer spend in the wider economy.”