The latest data compiled by the British Retail Consortium and NielsenIQ shows that grocery prices rose by the highest amount since 2005 in June, increasing 4.4% compared to last year, and higher than the 3.1% year-on-year rise recorded in June.
Fresh food inflation rose to 8% according to the index, from 6.2% a month before, the highest rate since March 2009. BRC chief executive Helen Dickinson commented, “Households and businesses must prepare for a difficult period as inflationary pressures hit home. Rising production costs – from the price of animal feed and fertiliser to availability of produce, exacerbated by the war in Ukraine – coupled with exorbitant land transport costs, led food prices to rocket.”
However, NielsenIQ also reported that the average basket spend on meat is £40.99 versus £43.60 for meat alternatives and just £30.80 for vegetables. Buying meat substitutes is considerably more expensive than swapping meat for fresh vegetables.
Katrina Bishop, UK thought leadership activation manager at NielsenIQ, said, “We may see a slight shift in priorities from shoppers as they seek to find alternative ways to balance this. For example, cutting back on grocery spending and on meat may result in cooking with fresh vegetables rather than seeking out meat alternatives.”
The BRC also said that retailers are taking action to shelter consumers from the worst effects of food inflation. Helen Dickinson added, “As inflation reaches new heights, retailers are doing all they can to absorb as much of these rising costs as possible and to look for efficiencies in their businesses and supply chain.
“With households enduring a cost-of-living crunch, retailers are expanding their value ranges to offer the widest variety of goods to those most in need, providing discounts to vulnerable groups, and raising staff pay.”