Food inflation focus: British staples skyrocket, everyday items soar for US shoppers
US consumers are forking out for much more for eggs, margarine and bread
18 Apr 2023 --- Ramifications from the war in Ukraine continue to impact global food prices. Honing in on this, we look at how inflation continues to affect shopping baskets in the US, the UK and New Zealand. New analysis from Which?, a UK-based consumer association, reveals that British supermarket F&Bs prices continued to rise last month costing on average 17.2% more than the year previous.
On the other side of the pond, CNBC Make It explores the consumer price index data to see how much more Americans are paying for everyday items.
Notably, inflation has been persistently high for the last two years. As of April, the pace of inflation has slowed from a year-over-year peak of 9.1% to 5%.
Groceries spike almost 20%
Since April 2021, the cost of essentials including groceries has increased by 20% or more. The cost of all items on the index increased by 13% in that time, reveals CNBC Make It.
The cost of food prepared at home has also risen by almost 20%. Within that category, the price of some cooking staples have skyrocketed. Margarine prices increased by 54%, largely due to the war in Ukraine, which is the world’s number one exporter of sunflower oil.
That’s the biggest increase of all food items in the Labor Bureau’s consumer price index, with a 13-ounce (0.37 kg) tub of margarine increasing from about US$3.25 to US$5 in the last two years.
rising fertilizer and labor costs are contributing factors.Relatedly, milk and bread production have also been affected by the conflict in Ukraine, with prices rising 19% and 21%, respectively. Notably,
Chicken prices have soared, too, as wholesale producers struggled to meet demand after cutting back production early in the COVID-19 pandemic. Prices declined slightly after peaking in late 2022, but they’re still up 20% over the last two years, states CNBC Make It.
Meanwhile, avian flu decimated egg-laying flocks of chickens, which accounted for a dramatic surge in egg prices last year. The market dynamics for eggs are still being felt now.
Which? survey shines a light on UK food prices
The consumer association analyzed price inflation on 11 popular food items, comparing 2,512 products from eight major supermarkets between January-March 2022 with January-March 2023.
Cheddar cheese, for example, increased by an average of 28.3% across all the supermarkets in the three months to March 2023, compared to the same period the year before. One example is Dragon Welsh Mature Cheddar 180g at Asda, which went from £1 (US$1.24) to £1.80 (US$2.24) – an increase of 80% year on year.
The cost of porridge oats went up by an average of 35.5%, and an example was at Ocado, where Quaker Oat So Simple Protein Porridge Pot Original 49g went from £0.94 (US$1.17) to £1.56 (US$1.94) – an increase of 65.5%.
Which? also looked at large sliced white bread and found average increases of 22.8%. However, the Bakery at Asda Soft White Medium Sliced Bread 800g went from £0.56 (US$0.70) to £0.94 (US$1.17), an increase of 67%.
For white potatoes, average inflation was around 14% across the supermarkets, but at Morrisons, a four-pack of baking potatoes went from £0.40 (US$0.50) to £0.66 (US$0.82) – a rise of 63.5%.
Inflation on pork sausages was 26.8% on average, but Just Essentials by Asda 8 Pork Sausages 454g went from £0.81 (US$1.01) to £1.40 (US$1.74), a 73.5% increase. Similarly, the value version at Tesco, Woodside Farms 8 Pork Sausages 454g, went from £0.80 (US$0.99) to £1.39 (US$1.73), a 73.3% increase.
“Our latest supermarket food and drink tracker paints a bleak picture for the millions of households already skipping meals of how inflation is impacting prices on supermarket shelves, with the poorest once again feeling the brunt of the cost of living crisis,” explains Sue Davies, Which?’s head of Food Policy.
“While the whole food chain affects prices, supermarkets can do more to support consumers, including ensuring everyone has easy access to basic, affordable food ranges at a store near them, 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,” she adds.
Helen Dickinson, chief executive of the British Retail Consortium, comments: “While households will be pleased to see that inflation may have passed its peak, prices are still high. Food prices, especially for fruit, vegetables and sugar, rose as poor harvests in Europe and North Africa reduced availability, and the weak pound made importing more expensive.”
“With food price inflation likely to slow in the coming months as we enter the UK growing season, we expect wider inflation will continue to ease. Nonetheless, prices for consumers will remain high, especially as household bill support is lifted. Retailers remain committed to helping their customers and keeping prices as low as possible, by expanding value ranges and offering discounts for vulnerable groups. We need Government to play its part by minimizing the oncoming regulatory burdens, as these will hinder investment and will ultimately contribute to ongoing higher prices for households.”
What are the supermarkets saying?
Some of the biggest UK retailers weighed in on the latest analysis from Which?.
An Asda spokesperson says: “We’re working hard to keep prices in check for customers despite global inflationary pressures and we remain the lowest-priced major supermarket – a position recognized by Which? in their regular monthly basket comparison, which has named Asda as the cheapest supermarket for a big shop every month for the last three years.”
“We recently announced we would be freezing the prices of over 500 popular branded and own label products, more than half of which are fresh meat, dairy, fruit and vegetable products, until the end of May.”
Meanwhile, an Ocado spokesperson affirms, “We know how important value is to our consumers right now.”
“We continue to support our customers by investing in price across branded and own-brand products,” they state.
A Sainsbury’s spokesperson reveals that the supermarket is “working hard to keep prices low.”
“In the last two years, we have invested over £550 million (US$583.9 million) into lowering prices to put food back at the heart of Sainsbury’s. We’re committed to doing everything we can to support customers with the rising cost of living. Through initiatives such as our Aldi Price Match campaign, Price Lock and My Nectar Prices, customers can find low prices on the products they buy most often in stores and online – including butter, broccoli, cabbage and carrots.”
A Waitrose spokesperson adds: “Dairy is one of the categories most impacted by inflation, and no retailer is immune to this. We’re working hard to keep our prices as low as possible while paying our farmers and suppliers fairly and maintaining high animal welfare standards.”
Prices down under
Meanwhile, New Zealand food prices soared to their highest level in over thirty years (to 12.1%) as flash floods crippled fruit and vegetable farms. Moreover, last year’s ban on battery cages for hens has driven egg prices up as the EU might implement a similar ban on chicken cages this year.
While floods have dampened New Zealand’s crops, in Argentina, a severe drought is affecting Argentina’s main export products, soybean and corn. The country already experienced a historically meager agricultural production last year due to the same drought.
Meanwhile, the National Institute of Statistics and Census puts food inflation in Argentina at 110.2%, one of the highest rates in the world.
By Elizabeth Green
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