UK food price inflation remains at its third-highest level since the financial crisis, with the annual rate at which the cost of groceries is increasing at the elevated level of 17.2%, retail industry data shows.
Prices barely eased during the four weeks to 14 May to only marginally below April’s 17.3% figure, according to the latest release from the analytics firm Kantar, representing the third-highest rate of grocery inflation since 2008.
The report came as the chancellor, Jeremy Hunt, was scheduled to meet food manufacturers on Tuesday, to raise concerns over the impact of grocery price inflation on squeezed households.
Even though the average cost of four pints of milk has come down by 8p since last month, it remains 30p higher than it was this time last year at £1.60.
Stubbornly high food and drink prices have added an extra £833 a year to shoppers’ bills, Kantar found, unless consumers make changes to their usual habits to try to cut the cost.
More consumers are turning to supermarket own-brand products, a trend also reported in April, in an attempt to keep their bills under control. Sales of the cheapest own-label products soared by 15.2% over the past month, almost double the 8.3% increase for branded products.
Fraser McKevitt, the head of retail and consumer insight at Kantar, said: “The drop in grocery price inflation, which is down by 0.1 percentage points on last month’s figure, is without doubt welcome news for shoppers – but it is still incredibly high.”
Shoppers flocked to the discount supermarkets, Aldi and Lidl, as they sought bargains. Aldi became the fastest-growing grocer over the past month as its sales increased by 24%, while sales at Lidl rose by 23.2%.
However, Waitrose benefited from shoppers splashing out on extra treats before the coronation of King Charles. Its sales grew by 4.8%, the highest growth rate it has experienced for more than two years.
Take-home grocery sales rose by nearly 11% over the past month, as consumers stocked up on supplies to enjoy over the coronation bank holiday weekend.
Despite the pressure on household budgets, consumers spent an extra £218m on groceries during the week of the coronation, when there was a rise in sales of wine and quiche.
Sales of sparkling wine shot up by 129%, and of still wine by 33%, as shoppers planned to raise a glass over the long weekend.
“Lots of people seem to have got into the spirit of the royal occasion, grabbing their chance to have a go at the official coronation quiche recipe,” McKevitt said. “Sales of ingredients like chilled pastry surged by 89%, while fresh cream sales jumped by 80% and frozen broad beans by 57%.”
Hunt’s meeting with representatives from the food manufacturing industry comes amid warnings that the rising cost of groceries will overtake the price of energy in the coming months as the driving force behind inflation, hitting poorer households the hardest.
Grocery bills are predicted to increase further, while energy prices are expected to begin falling over the summer, according to analysis from the Resolution Foundation thinktank.
The consumer group Which? called on the government to undertake its review of food pricing rules as quickly as possible, to help shoppers when comparing products.
Rocio Concha, the Which? director of policy and advocacy, said: “It’s good news the government has committed to reviewing pricing rules, but this must be undertaken as soon as possible as much clearer pricing is vital in enabling shoppers to compare prices and find the best value products.
“Supermarkets should also be making it easier for people by urgently committing to stocking essential budget ranges in all their stores, particularly in areas where people are most in need.”
