By James Davey
LONDON (Reuters) – British online supermarket Ocado Retail has cut the prices of another 200 items, in a further sign that UK food price inflation will continue its downward trajectory and relieve some of the pressure on consumers.
The business, a 50/50 joint venture between Ocado Group and Marks & Spencer, said on Wednesday it was lowering prices by an average of 8%.
Grocery prices remain in the spotlight as Britons grapple with a cost-of-living crisis stretching into its second year.
UK food price inflation reached its highest since 1977 in March at over 19%. This official measure slowed to 14.9% in July and, while industry data showed it at 12.7% in August, rising food prices remain a major strain on the finances of many households.
Its recent downward movement is being closely watched by consumers, lawmakers and the Bank of England (BoE) as its mulls further rises in interest rates.
Examples of Ocado Retail’s latest round of cuts include a four can pack of Heinz beans reduced to 3.75 pounds ($4.79) from 4 pounds, Copella cloudy apple juice reduced to 2 pounds from 2.80 pounds and a pack of Quaker rolled porridge oats reduced to 1.50 pounds from 1.75 pounds.
The joint venture cut the prices of 100 items in June.
While all British supermarkets, including market leader Tesco, have reduced the prices of some products in recent months, researcher the Institute of Grocery Distribution has said that UK food price inflation will still be around 9% in December.
Retailers have cautioned that further supply chain challenges could add to input costs in the months ahead.
Potential issues include poor UK harvests, Russia’s withdrawal from the Black Sea Grain Initiative and subsequent targeting of Ukrainian grain facilities, as well as rice export restrictions from India.
Governments across Europe are battling high inflation. In May, the French government secured a pledge from 75 top food companies to cut prices on hundreds of products, while Hungary’s government has imposed mandatory price cuts.
EXPLAINER-Why is UK food inflation so stubbornly high?
($1 = 0.7829 pounds)
(Reporting by James Davey; Editing by Mark Potter)
