Shop price inflation has returned to “normal levels”, driven by the slowing of food inflation as fresh food inflation falls to its lowest level in three years.

According to the latest data from the British Retail Consortium (BRC) and NielsenIQ, shop price annual inflation eased to 0.6% in May, down from 0.8% in April, leaving it below the current three month average rate of 0.9% and at its lowest annual growth since November 2021.

Food inflation slowed to 3.2% in May, down from 3.4% in April, which came as the thirteenth consecutive deceleration in the food category, with inflation at its lowest since February 2022.

Fresh food also decelerated to 2% in May, down from 2.4% – a figure that is below its three month average of 2.3% and at its lowest level since November 2021.

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The ambient food category saw less dramatic deceleration, as BRC chief executive Helen Dickinson said it has remained “stickier” than other sections, especially for sugary products as global sugar prices remain high.

Despite this, ambient food still slowed to 4.8% in May, down from 4.9% – marking its lowest level since June 2022.

Dickinson said: “Shop price inflation has returned to normal levels, at just 0.6%. This was helped by slowing food inflation, with fresh food inflation falling to its lowest level since November 2021.

“Retailers are playing a key part in bringing inflation down, but future government policy must support this too. Retail plays a key role in every part of the country, from the smallest village to the largest city, employing millions of people, and serving millions more.

“As the cost burden of new policies rises – from business rates to packaging taxes – this affects not just the businesses, but their customers too. With an election in a matter of weeks, it is vital that parties detail their support for customers and retailers in their upcoming manifestos.”

NielsenIQ head of retailer and business insight Mike Watkins added: “After a number of months of falling input prices, we are now seeing food inflation stabilise and retailers continue to pass on price cuts to shoppers.

“Across the industry whilst inflationary pressure has eased and there is some improvement in shopper sentiment, the unseasonable weather has dampened retail sales so lower prices look set to continue and promotional activity is likely to increase drive demand.”