According to new data from the Office for National Statistics (ONS), the food and non-alcoholic beverage annual inflation rate reached 10.1% in October, down from 12.2% a month earlier.
This equates to a 0.1% price rise from September to October, compared to a 2% increase between these two months last year.
The rate has declined every month since March of this year when food and drink inflation had reached 19.2%, a 45-year high. According to the ONS, inflation was last below 10% in June 2022.
FDF calls for investment in F&B manufacturing
Karen Betts, chief executive at the Food and Drink Federation (FDF), attributed the trend to a fall in input costs and the efforts of food and drink manufacturers over the past few years “to shield shoppers from the full impact of inflation”.
“This has impacted manufacturing margins, which have fallen to their lowest levels in 40 years,” Betts added.
Falling inflation is positive news for consumers in the lead up to Christmas, but Betts warned that more investment in the food and drink manufacturing sector was needed, with current rates languishing behind previous years.
“Investment in the first half of this year more than a third lower than in the same period four years ago,” she explained.
“For the industry to recover its resilience after the shocks of recent years, we need the government urgently to review the conditions for investment in our sector. Making full expensing permanent in the Autumn Statement would be significant in incentivising investment.”
Ed Bignold, head of travel, hospitality and leisure at Alvarez & Marsal, said that the declining inflation rate was good news for foodservice businesses as December approaches.
“Price growth is expected to continue to decline in the coming months, although businesses will need to remain vigilant and flexible when it comes to pricing as higher rates start to impact household budgets,” he added.