Supermarkets may be encouraged to cap the price of basics such as bread and milk under plans being drawn up by the Government.
Prime Minister Rishi Sunak and Chancellor Jeremy Hunt have met with the bosses of grocery retailers recently to discuss the mounting pressure on family budgets as it was revealed that food prices are set to outstrip energy costs.
The PM's advisors are said to be figuring out a deal with supermarkets amid concerns that soaring food inflation is hitting poorer people harder as they spend a disproportionate amount of their disposable income on essentials. The news comes as consumer group Which? called on Mr Sunak to challenge supermarket chief executives to take urgent action to help consumers cope with increases at the checkout.
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More than 87,000 supporters have signed Which?’s petition so far calling on the supermarkets to take action. The consumer champion has also called for convenience stores owned by major retailers - for instance Tesco Express or Sainsbury's Local - to stock a range of essential budget lines that support a healthy diet, especially in the areas where they're most needed.
A Government source told The Mirror that proposals were just at a "drawing board" stage. While any agreement would be voluntary, the intervention would still amount to the biggest attempt to manage supermarket prices for 50 years, when Prime Minister Ted Heath set up price controls in 1973.
Sue Davies, Which? head of food policy, said: "It’s very alarming to see products such as meat, cheese and vegetables that people rely on still rapidly soaring in price. We urge Rishi Sunak to ask supermarkets to commit to do much more This includes stocking budget lines in convenience stores to ensure easy access to basic, affordable food ranges that support a healthy diet, particularly in areas where people are most in need. Supermarkets must also provide transparent pricing so people can easily work out which products offer the best value."
The level of food price inflation is still the second fastest increase the British Retail Consortium (BRC) has ever measured and overall shop price inflation rose from 8.8 per cent to nine per cent in May, hitting its highest level on record. The price of fresh food increased by 17.2 per cent in the 12 months to May, down from 17.8 per cent the previous month.
There are some signs that grocery prices are starting to fall. Sainsbury’s has cut the price of over 40 dairy products by up to 60% and Tesco recently slashed the cost of pasta and cooking oil. Tesco kicked off the price war by reducing the price of milk, with Aldi, Lidl, Asda and Sainsbury’s all following suit. Sainsbury’s then went on to cut the price of some butter and bread products, with other supermarkets again following with similar announcements.
But Which?'s latest research reveals that some meat, yoghurt and vegetables have doubled in price over the past year. On average in the month to the end of April, meat prices were up 15%, fish up 16.5%, yoghurts up 21.8%, and veg up 15.3%, but there were examples of individual items doubling in price in the space of a year. Which? singled out several examples, including Aberdoyle Dairies Natural Cottage Cheese 300g at Lidl rising from 67p to £1.34 – a 100.9% increase, and a four pack of brown onions at Morrisons from 65p to £1.24, a 90.8% increase.
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The Which? tracker also found that prices in Lidl and Aldi were rising the fastest, with annual inflation for one month to the end of April 2023 at 24.9% and 22.9% respectively. At the other end of the scale, upmarket grocers Waitrose and Ocado showed the lowest rises, at 13.3% and 11%.
The UK's biggest retailer, Tesco, showed inflation at 14.5%, Sainsbury's 14.7%, Asda 17.5% and Morrisons 18.4%.
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