Cost Of Grocery Items On The Up

The research, carried out by Verdict Research, shows that this increase has added about £514m to the UK’s monthly grocery bill. For hard pressed consumers this comes on top of a host of other price rises and demonstrates why, for many households, inflation feels far higher than the Government’s official rate.

“Food shopping is something most people do regularly, so they immediately notice increases in prices more than they do in other areas,” comments Neil Saunders, consulting director at Verdict. “For many, the price of the weekly food shop is the real measure of inflation – it’s what they react to when they make decisions about the household budget and what to spend on other things.

“For those at the lower end of the income scale, increases in food prices can be very difficult to cope with because there aren’t many other areas where they can cut back to make savings. It’s one of the reasons the abolition of the ten pence rate of tax was seen as a slap in the face for poorer families – it came at a time when they are already struggling to buy even basic items.”

One of the sharpest areas of increase is in the price of fresh fruit and vegetables, which have been up by almost 16% since the beginning of the year. Almost all essential food stuffs, including dairy, store cupboard products like pasta, canned goods and condiments, as well as meat and fish, have seen above average increases.

Although the price of goods is rising, the UK’s grocers are helping to mitigate price increases. “No matter how bad food inflation is, it would be a whole lot worse if it wasn’t for our highly competitive grocery sector,” says Mr Saunders. “The size and efficiency of the leading chains, the economies of scale they bring to the whole retail food market and the competition between them has all helped mitigate the inflation passed to the consumer.”

But, the future prospects will bring little comfort to consumers. Verdict forecasts that food price inflation will remain strong for the duration of 2008 and the situation will persist into 2009. “There is very little sign that the price of food is going to moderate or fall,” concludes Mr Saunders. “The price increase is partly a result of global demand outstripping supply and there is very little that can be done to remedy that imbalance over the medium term.”