Food price increases start to impact grocery sector
The latest grocery market figures from Kantar have showed that like-for-like grocery price inflation stands at 2.1% in the latest four weeks, its highest level since August 2020.
In the latest 12 weeks Kantar also revealed that food inflation has hit 1.5%. Prices are rising fastest in markets such as savoury snacks, canned colas and crisps while falling in fresh bacon, vegetables and cat and dog treats, it revealed.
The news follows a warning from 2 Sisters Food Group president Ranjit Singh Boparan who said that consumers need to be prepared for higher prices and less choice.
Price warnings
He said that food was too cheap and needed to reflect the spiralling costs faced by food manufacturers. He predicted that British Shoppers would soon be faced with a ‘great food reset’ with less choice and higher prices, thanks to rampant inflation and a continued lack of labour.
This was a view also communicated by Kraft Heinz chief executive Miguel Patricio who warned people to get used to higher food prices, as rising production costs continue to put pressure on producers.
“Grocery prices are rising and this month inflation hit its highest rate since August 2020, when retailers were still cutting promotions to maintain stock on the shelves. As prices increase in certain categories, we can expect shoppers to continue to visit several supermarkets and shop around to find the best deals. Already, households visit an average of 3.3 supermarkets per month in order to find the best value for money,” said Fraser McKevitt, head of retail and consumer insight at Kantar. Kantar said its inflation figures are based on over 75,000 identical products compared year-on-year in the proportions purchased by British shoppers.
Work with suppliers
The news comes as buying expert Lynx Purchasing in its Autumn/Winter Market Update that warned hospitality operators to work closely with their suppliers in the lead to Christmas.
"What is apparent is that inflation is already having an impact. Figures from the Office of National Statistics showed restaurant prices paid by customers were up 5.9% year-on-year in September, as operators passed on their higher buying costs,” said Lynx Purchasing managing director Rachel Dobson.
