A recent analysis by Which?, which studied over 26,000 items at multiple stores, found that the prices of several everyday products have risen substantially. These items include juice, chocolate, water, fish, chilled ready meals, and cheese. The upward trend is a worrying sign for consumers whose wallets have already been squeezed due to the pandemic.
For example, Morrisons’ four brown onions have increased from 65p to £1.24, an alarming 90.8% rise. Lancashire Farm Natural Bio Yoghurt has experienced an 85.3% increase in price, rising from £1.18 to £2.18. Aberdoyle Dairies Natural Cottage Cheese 300g at Lidl has seen an upsurge of 100.9%, going from an average of 67p to £1.34.
Although food inflation fell slightly from 17.2% in March to 17.1% in April, people are still grappling with rising costs in other areas of life. This trend is confirmed by the Which? food tracker. It’s no secret that food prices have spiked in many areas due to supply chain issues and rising costs from last year. The economic impacts of the pandemic are felt by almost everyone, and the sluggish economy has exacerbated the situation.
According to Mark Lynch, partner at corporate finance house to the consumer industries, Oghma Partners, “Food price inflation is being driven not only by current shortages of fruit and veg related to supply chain issues but also by the lag effect of food manufacturers catching up with previous cost pressures from last year. These price increases are necessary to recoup the margins lost over the last twelve months”.
Lynch says that some costs are coming down, notably that of energy, but for inflationary pressures to be fully flushed out of the system, a reduction in raw material costs is required. There is uncertainty about the future since Brexit, coupled with limited support given to a variety of agri-sectors, has affected supply chains, leading to an increase in pork prices, egg availability, supply of fresh produce, and pricing.
Although there are indications of a cyclical decline in food pricing in H2 2023, the UK may be in a unique position that prevents it from fully ridding itself of inflation from domestically produced products due to the lengthy hangover from the departure from the EU.
