Morning Update

Prices at shops have eased for the second month in a row according to the British Retail Consortium’s Shop Price Index. The index slowed 60bps from last month’s print of 9% as it fell below the three-month moving average of 8.7%. This came as food price inflation also eased for the second consecutive month with the index coming in at 14.6%. This represented a significant drop from last month’s print of 15.4% as fresh food inflation eased significantly (from 17.2% to 15.7%).

Following the print, the BRC’s CEO Helen Dickenson welcomed the easing of inflation but stated that “along with a rise in business rates, and the introduction of border controls in October, these policies could hinder the Government’s efforts to combat inflation.” She continued by stating that “reforms to the packaging levy and a new deposit return scheme could create an additional £4 billion burden on retailers and their customers.”

According to the BRC, if the current situation continues, food price inflation should decline into single digits by the end of the year.

Earlier this month Scotland announced that they would delay the launch of Scotland’s Deposit Return Scheme until at least October 2025. This came after Westminster refused to allow glass to be included in the deposit scheme which would see consumers pay a 20p deposit on a single-use drinks container. This deposit would then be returned at return points which according to the plan “all retailers who sell, to consumers on their premises, in-scope drinks for take away must operate a return point”. Scotland’s Deposit Return Scheme campaign states that 70% of Scots want a DRS and that once operational it would save 160,000 tonnes of CO2eq each year. The campaign also suggests that £62million a year could be saved tackling the indirect impacts of litter with some 44,000 less bottles being littered each day.

Earlier this year the UK government approved a partial exemption to the Internal Market Act for the Scottish DRS but stated that glass bottles would be exempt. As such, the Scottish parliament have delayed the scheme until October 2025.