Food inflation doubles in a month as UK shoppers start to feel the pinch
Sharp fall in pound since EU referendum feeds into big rise in food prices with butter up 15% in a month, fish up 8% and tea up 6.6%
Supermarket inflation doubled last month as shoppers had to pay more for staples such as butter and tea, underlining expectations that household budgets will come under extra pressure in 2017.
Grocery inflation jumped to a near three-year high of 1.4% in the 12 weeks to 26 February, from 0.7% in the 12 weeks to 29 January, according to the consumer consultancy Kantar Worldpanel. The cost of fruit and vegetables – a large proportion of which are imported – also rose.
Butter prices rose 15.8% over the period, fish prices rose 8.8%, and tea prices were up 6%.
The sharp jump in food inflation shows the pace at which the sharp drop in the value of the pound since the Brexit vote in June is now feeding into consumer prices. A weaker pound makes goods imported from overseas more expensive.
Rising food prices ends a run of falling costs that began in September 2014 as supermarket competition in the sector intensified and companies stepped up price wars.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said that supermarkets including Tesco, Sainsbury’s, Asda and Morrisons – the so-called “big four” – were now benefiting from rising prices.
“While consumers may be starting to feel a very slight pinch, increased inflation has led to overall market growth. Simultaneously, combined sales at the UK’s four largest supermarkets increased by 0.5% year on year.”
It comes as the OECD warned on Tuesday that rising inflation would hit households in Britain this year, making them less willing to spend money, and hold back economic growth. The Paris-based thinktank expects UK growth to slow in 2017 to 1.6% from 1.8% in 2016.
As families grapple with rising prices, wage growth is expected to remain weak, further stretching weekly budgets. The headline rate of inflation measured by the Office for National Statistics is expected to rise to about 3% from a current rate of 1.8%.
Kantar pointed out that not all grocery prices – there were falls in a number of items, including crisps, bacon, and eggs.
The Kantar figures are not the official inflation figures, but are based on 75,000 identical products compared year-on-year in the proportions purchased by shoppers.
https://www.theguardian.com/business/20 ... feel-pinchBought a carton of Tropicana Pineapple this morning...it's shrunk by 100ml. Frozen cod the other week only does 2 dinners, whereas it used to do me for 3. Sainsbury's butter from 85p to an eye-watering £1.40.
Was reading "The Sun Says" on Saturday (FYI, it was left on the train) and they were cock-a-hoop about how great the lower pound has been for people from abroad. Well that's great, but I don't bloody live abroad!
Yes, you can sarcastically laugh at how my tin of Heinz organic beans have gone from 50p to £1.10 'oh boo hoo' but I don't see why I should be celebrating my living standards having to go backwards. Doesn't feel very aspirational to me...
Despite the article, bacon has gone up in Tesco from £3 to £3.80, and eggs in Sainsbury's 80p to 90p. Crisps have remained a £1 but I don't really eat many crisps. When it comes to food, I fail to see any benefits whatsoever.