UK cost of living crisis: Food price inflation hits nearly 10%

2022-07-19

Shoppers face £454 rise in annual grocery bills as food price inflation hits the second-highest level on record – with dog food and butter soaring by 20% and milk by 17%

Britain’s cost of living crisis is biting hard as cash-strapped families face a £454 jump in annual grocery bills
Milk, butter and dog food all experienced price increases of around 20% in 12 weeks to July 10 on last year
Burgers, halloumi and coleslaw all cost 13%, 17% and 14% more than the same time last year

Britain’s cost of living crisis is biting hard as cash-strapped families face a £454 jump in annual grocery bills amid rampaging food and drink price inflation.

Shoppers throwing barbecues this summer are set to feel the pinch most, with burgers, halloumi and coleslaw all costing 13%, 17% and 14% more than the same time last year, according to fresh industry data from market researchers Kantar.

And families have increasingly chosen supermarkets’ own-brand products over well-known brands to drive down the cost of their weekly shop.

Supply chain issues and labour pressures have added to costs in food production, which are now being fed back to shoppers.

Fraser McKevitt, head of retail and consumer insight at Kantar, said he expects the overall record for grocery inflation to be surpassed ‘come August’.

He added: ‘Grocery prices continue to soar to near record-breaking heights and have jumped by another 1.6 percentage points since last month.

Milk, butter and dog food experienced massive price increases of around 20% in the 12 weeks to July 10 compared to the same period last year, while grocery price inflation jumped to nearly 10% – the second highest level on record – over the four weeks to July 10 compared to last year. And shoppers throwing barbecues this summer are set to feel the pinch most, with burgers, halloumi and coleslaw all costing 13%, 17% and 14% more than the same time last year, according to Kantar

File photo of shoppers in a Sainsbury’s supermarket. Grocery price inflation has leapt by 9.9% over the past four weeks, according to fresh industry data

Shoppers wear face masks in a Tesco supermarket in south London last week

Around 1.3 million families in Britain had no savings before the cost-of-living crisis struck, a think-tank has said.

Now, some will be pinning their hopes on friends or family to help them make ends meet, while others believe they will simply be unable to cope, according to research from the Resolution Foundation.

It said that in the period running up to the outbreak of Covid in the UK, nearly half of families had savings worth less than a month’s income.

Around 4 per cent – 1.3 million families – had no savings at all, the think-tank said.

Molly Broome, economist at the Resolution Foundation, said: ‘Britain’s huge wealth divides mean that around 1.3 million families, particularly those on low incomes, entered the pandemic without any savings.

‘With many of those families unable to save during lockdowns, they are now approaching the biggest cost-of-living crisis in a generation with no financial buffer.

‘Families with no savings are hugely reliant on friends and family to cope with unexpected expenses.

‘However, there’s no guarantee that they’ll be in a position to provide support – because surging energy bills will affect almost all households during the difficult winter to come. As a result, anxiety levels among families with no savings safety net are far higher than those with savings to fall back on.’

‘This is the second highest level of grocery inflation that we’ve seen since we started tracking prices in this way in 2008 and we’re likely to surpass the previous high come August.

‘With grocery price inflation at almost 10%, people are now facing a £454 increase to their annual grocery bills.’

Supermarkets have also seen a 14% jump in ice cream sales and a 66% rise for sun care products over the month as Britons experienced soaring temperatures.

Mr McKevitt added: ‘People are increasingly turning to own-label products to drive down the cost of their weekly shop.

‘Supermarkets’ own lines are growing by 4.1% this period, while sales of branded items have fallen by 2.4%.

‘It’s a complex picture and the grocers are busy negotiating with their suppliers to mitigate impact at the tills as far as possible. We’ve seen this play out in the headlines in recent weeks, with some well-known brands temporarily disappearing from supermarket shelves over pricing disputes.’

It comes as total supermarket sales increased by 0.1% over the 12 weeks to July 10, the first time the market has been in growth since April last year.

German discounters Aldi and Lidl continued to see rapid sales growth – with increases of 11.3% and 13.9% respectively – as shoppers turned to them for cheaper prices amid pressure on their household budgets.

Tesco also remained the only one of the big four grocers, which also include Sainsbury’s, Asda and Morrisons, to report growth for the quarter. The weakest performer was Morrisons, which witnessed a 6.7% drop for the period, according to the figures.

With food inflation soaring, separate analysis by MailOnline found how the average 20-item shopping basket now costs £4.29 more than it did 12 months ago.

The average basket, which includes staple food items, home goods and toiletries, now costs £67.07. The same basket of items last year costs £62.78.

And it was at budget chain Iceland where the average cost of 20-item basket increased the most. According to the data, an average basket at Iceland costing £60.62 last year now costs £67.90 – a rise of £7.28 in the last 12 months.

Asda also saw one of the largest rises in the cost of an average shopping basket, of £4.57. But it remained the cheapest supermarket compared to rivals Tesco, Sainsbury’s and Morrisons, with a basket costing £61.29.

Among the biggest price rises has been for dairy products, with milk, cheese and butter all seeing sharp increases since June last year. Earlier this month, it emerged that a 1kg pack of Lurpak was being sold in an Iceland for nearly £10.

Separate data shows that cash-strapped Britons appear to be forgoing expensive cuts of meat and fish in an effort to save money.

Volume sales of every type of meat, fish and poultry have nosedived in the past 12 weeks compared to the same period last year as prices have soared and only chicken has seen a rise in spending, though it is only an increase of 0.6%.

It is thought some families may be switching from expensive cuts to cheaper chicken options for their protein.

Analysis of Trolley.co.uk data by MailOnline from last month shows how the average cost of a 20 item shopping basket across all supermarkets is now £4.29 more expensive than it was in June last year – a rise of 8.83 per cent. Pictured: A graphic showing how individual items in the 20 item basket have increased. The costs are based on average costs of an item across a number of supermarkets and include larger packs and more expensive brands – bringing up the average cost. Pictures are for illustrative purposes and not the actual cost of those items

Britons looking to cut back on their food bills amid the cost of living crisis are being hit with bigger price rises in discount chains than in their supermarket rivals, according to new data

IN NUMBERS: Cost of living crisis mean less socialising with friends and saving money, while monthly outgoings and supermarket costs soar

The latest Wealth & Wellbeing survey by insurance firm LV= has painted a gloomy picture when it comes to the average Brit’s financial concerns.

Statistics collected by The Grocer from the Retail Price Index also show the rising prices in supermarkets.

Below are what the poll of 4,000 people, carried out in June, and the latest statistics, mean for the average Briton:

12% – the average price increase of a weekly supermarket shop

30% said they are having to spend less money on socialising

36% described their financial situation as ‘struggling’

38% of Brits are worried about money

43% expect their finances to deteriorate over the next quarter

46% of 18-34-year-olds are worried about money

53% say their finances have worsened in the past three months

61% said their total monthly outgoings had increased over the last quarter

Year on year comparisons by analysts Kantar for The Grocer show the amount of chicken sold is down 9.7%, compared to falls of 13.7% for beef, 10.6% for pork, 23.7% for lamb and 11.6% for fish.

It is thought millions of families are cutting back on their red meat and fish intake in particular.

Figures for the amount spent also suggest that many may be moving to cheaper sources of protein, hence the small but significant rise in value sales for chicken.

This comes as the amount spent on beef fell by 7.7% in value, pork by 5.9%, lamb by 14.4% and fish by 8%.

Recent Retail Price Index figures for food bought by ordinary shoppers showed the average price of a roasting joint of beef had risen by 9.8% to £11.34 over the year to April, while chicken had risen by 10.4% to £3 a kilo.

Elsewhere, the VoucherCodes.co.uk Food Spend Report reveals that vegans are consistently spending more on groceries, eating out and takeaways than the national average, with a total food spend of £14.02billion a year (£8,760 per person).

This means that vegan consumers are spending almost a third more than the national average on groceries (£2,802 per person), and twice the national average on food each year (£4,488 per person).

Vegetarian consumers also spend more than the national average on groceries each year, with an average spend of £2,928 per head per year. As a result, grocery retailers are making £4.68billion from vegetarian consumers each year.

The report reveals that meat-free alternatives are driving up the cost of groceries for vegan and vegetarian consumers. On average, vegans spend £35 per month buying meat substitute products such as Tofu, Quorn and Seitan, and vegetarians follow shortly behind at £27 per month. In contrast, the average meat-eating shopper spends just £21 on meat.

Glesni Phillips, a data analyst for Meat Promotion Wales, told The Grocer: ‘In previous periods where there has been a squeeze on living standards, there can be shifts in demand for different proteins.

‘All proteins are experiencing increases in their average prices, but fish remains the most expensive protein, followed by lamb, and, despite one of the biggest price rises, chicken remains the cheapest protein.

‘Product choice is the main way shoppers are choosing to manage inflation now, and so shoppers are switching between cuts in order to save money.’

Many in the industry believe the falls are not part of the growing vegetarian movement but a reaction to higher prices which is affecting all sectors, not just meat products.

Oils, sauces, spreads, dairy and a host of other products have been affected by price rises caused by runaway inflation particularly to the costs of production because of the war in Ukraine and its effects on energy.

Rebecca Veale of the National Pig Association, added: ‘Knowing that consumers like to buy British pork, we do not believe that any reduction in consumption should displace British product and call on retail and foodservice to champion British meat and pay a fair price for it.

‘In order for British pork to remain on the shelves, a fair price needs to be paid to producers.’

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