food prices - Neighbourhood Retailer

Food costs push price rises to new 40-year high

Linda Stewart — Wed, 17 Aug 2022 13:36:49 +0000

Soaring food costs have pushed UK inflation into double digits for the first time since 1982, with prices continuing to rise at their fastest rate for more than 40 years.

Inflation hit 10.1% in the 12 months to July, up from 9.4% in June, the Office for National Statistics (ONS) said.

Soaring living costs are eating into household budgets, with prices rising faster than wages.

The Bank of England has said inflation could peak at more than 13% this year.

Energy, petrol and diesel costs are also contributing to inflation. But food and non-alcoholic drinks were the largest contributor to rising prices in July, according to the ONS.

The price of bread, cereals, milk, cheese and eggs rose the fastest, while the cost of vegetables, meat and chocolate were also higher.

Prices also rose for other staples, such as toilet rolls, pet food and toothbrushes.

The increase was above all economists’ forecasts in a Reuters poll for inflation to rise to 9.8% in July, and will do nothing to ease the Bank of England’s concerns that price pressures may become entrenched.

Despite warning that a recession was likely, the BoE earlier this month raised its key interest rate by 0.5% to 1.75% – its first half-point rise since 1995.

It forecast inflation would peak at 13.3% in October, when regulated household energy prices are next due to rise.

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World food prices drop after Ukraine grain pact: UN

Linda Stewart — Mon, 08 Aug 2022 09:08:48 +0000

World food prices fell sharply in July, partly thanks to a deal between Ukraine and Russia lifting a sea blockade that had stopped Ukrainian grain shipments, a UN agency has said.

Food prices soared to a record high in March after Russia invaded Ukraine, fuelling fears that the conflict would spark hunger in countries relying on their exports.

While prices remain high, they have now dropped for a fifth month in a row, falling by 8.6% in July compared to June, according to the Food and Agriculture Organization’s food price index.

The index, which measures the monthly change in international prices of a basket of food commodities, was still 13.1% higher than in July 2021.

The biggest drop was for vegetable oil prices, which fell by 19.2% between June and July to hit a 10-month low.

The cereal price index logged a monthly drop of 11.5%, the FAO said.

The decline for cereals was led by a fall in world wheat prices, “partly in reaction to the agreement reached between Ukraine and the Russian Federation to unblock Ukraine’s main Black Sea ports”, the UN agency said.

Shipments under last month’s UN-brokered deal began last week, with a first vessel carrying corn leaving Ukraine for Lebanon on Monday.

“The decline in food commodity prices from very high levels is welcome, especially when seen from a food access viewpoint,” FAO chief economist Maximo Torero said in a statement.

However, he said many uncertainties remain, pointing to high fertiliser prices, a bleak global economic outlook and currency movements.

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Belfast bakery closes over spiralling food prices

Linda Stewart — Wed, 03 Aug 2022 09:33:38 +0000

The owners of a west Belfast bakery say “crazy food prices” and increases in bills are responsible for the decision to close its doors after four years.

The owners of Tuckers Bakery and Deli, based on the Falls Road, said it had been a “very hard decision” to close and described being “truly heart broken”.

“Guys its with a heavy heart we write this post, but unfortunately due to the rising price increases in bills and crazy food prices we have decided to close our doors permanently,” they wrote on social media.

“It has been a very hard decision for us as a family run business and we are truly heart broken, but unfortunately with Covid and crazy price increases, it’s just not sustainable anymore to keep going.

“We have met some fantastic people over the years and we would like to thank every customer from the bottom of our hearts for their support and custom over the last 4 years.

“We will hopefully be back in the near future when things settle for hospitality. We honestly don’t know what more to say but thank you all so much. Much love Nicola and Dale.”

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Worse to come for food price rises: Food and Drink Federation

Linda Stewart — Mon, 04 Jul 2022 09:58:35 +0000

“Relentless” increases in the price of food may not hit their peak until next year, an industry group has warned.

The Food and Drink Federation, which represents UK food and drink makers, said it usually takes 7-12 months for producers’ costs to reach shop shelves.

Russia’s invasion of Ukraine has accelerated manufacturing costs such as energy and fertilizer.

The federation’s boss, Karen Betts, warned prices would “absolutely” get worse before they get better.

Food and drink price inflation rose to 8.7% in the year to May, according to the Office for National Statistics.

“I think the peak could well be into next year and that prices could well rise some way above 10%,” Ms Betts said.

Other groups, such as the Institute of Grocery Distribution, which provides analysis to major grocers, predict that prices could rise by as much as 15% as household staples such as bread, meat, dairy, fruit and vegetables become more expensive.

The UK’s overall inflation rate hit its highest level for 40 years in May, as the costs of energy, fuel and food continued to climb.

People struggling with the rising cost of living are already cutting back on groceries or even skipping meals, according to a BBC survey of UK households.

Ms Betts said that food and drink manufacturers had already seen costs rise during the pandemic due to supply and labour shortages – but the Ukraine war has worsened the situation.

“The manufacturers that I speak to are saying that at the moment all their input costs are rising, so that’s everything from ingredients to raw materials, energy, labour and they can’t see an end to that,” she said.

Both Russia and Ukraine are major suppliers of fertilizer, while Ukraine – known as the “breadbasket of Europe” – produces significant amounts of wheat, corn and sunflower oil.

But the conflict is disrupting the supply of these goods, driving up prices on international markets.

Meanwhile sanctions against Russia – a major oil and gas producer – have further pushed up global energy prices, hitting businesses and consumers alike.

Ms Betts said there was “usually a seven-to-12 month time lag in the prices that food manufacturers pay before those price rises are felt on shop shelves”.

“So, if it is costing more to plant and grow wheat or sunflowers for sunflower oil now then those price rises are going to take 12 months, perhaps longer to make their way into food prices in the UK,” she said.

The UK’s overall inflation rate hit 9.1% in May and the Bank of England predicts it could reach 11% this year.

One of the biggest concerns is that household energy bills are likely rise further in October, when the energy regulator Ofgem is expected to lift the cap on gas and electricity prices.

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Consumers shopping for groceries little and often: Kantar

Linda Stewart — Mon, 27 Jun 2022 10:31:29 +0000

Northern Irish grocery sales have dipped by 5.4% in the year to 12 June 2022, according to consumer insight company Kantar.

The company says this is linked to people eating fewer meals at home, but also reflects food price inflation.

Emer Healy, senior retail analyst at Kantar, comments: “This is due to people eating fewer meals around the kitchen table as we adapt to life out of lockdown and return to offices, schools, and restaurants. Rising grocery bills are clearly playing on consumers’ minds too, with accelerating inflation now also making its mark on how we shop.

“As shoppers return to pre-pandemic routines, we’re seeing people visit the grocers little and often. Baskets and trollies are getting smaller, with the volume of products purchased per trip declining by 10.4% over the past 12 weeks.

“People are heading out to the shops more frequently though and the number of visits to the supermarket is up 2.8% over the past three months. In another nod to normality, take-home alcohol sales have dropped by 13.7% as people opt to get out of the house and head to their local pub for a drink or two instead. ”

Emer Healy said we are seeing the impact of rising inflation on consumer behaviour, with grocery prices up 4.2% over the past year.
“That’s an increase of 0.6 percentage points from last month, when grocery price inflation stood at 3.6%, and points to the accelerating cost of living crisis in Northern Ireland. People will unsurprisingly be sticking close to those grocers which can offer the most competitive promotions in an effort to manage increasing costs,” she said.

“Sales at all of Northern Ireland’s major retailers have slowed compared with the highs of last year. Lidl performed well this month, it had the softest decline among all the grocers and also increased its share of the market by 0.3 percentage points. Tesco has maintained its position at the top of the table with a 36.0% share. Asda holds 16.2%, while Sainsbury’s accounts for 17.0% of the market this period.”

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