UK food inflation hits 13-year high, lifting annual grocery bills by £380 – business live

Introduction: Grocery inflation hit 13-year high

Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.

UK consumers are facing the steepest increase in food bills in 13 years, as the cost of living crisis hits households.

Grocery price inflation jumped to 8.3% over the four weeks to June 12 – up from 7% a month earlier and its highest level since April 2009, new figures from data firm Kantar show.

This means annual grocery bills will jump by £380 this year, adding to the burden on people who also face surging energy bills and record price for petrol and diesel at the pumps.

Fraser McKevitt, head of retail and consumer insight at Kantar, says food bills are rising sharply:

“This is over 100 pounds more than the number we reported in April this year, showing just how sharp price increases have been recently and the impact inflation is having on the sector,”

With food prices jumping, shoppers are increasingly swapping branded items for cheaper own-label products.

Kantar reports that sales of branded products fell by 1% in the 12 weeks to June 12, while own-label sales rose by 2.9% and value own-label lines jumped by 12%.

McKevitt said sales of own-label lines have been “boosted by Aldi and Lidl’s strong performances, both of whom have extensive own-label repertoires”, adding:

“We can also see consumers turning to value ranges, such as Asda Smart Price, Co-op Honest Value and Sainsbury’s Imperfectly Tasty, to save money.”

We reported last month that the UK’s “golden era” of cheap food was over, and Kantar’s figures confirm that the squeeze on households is getting worse.

Also coming up today

Britain’s biggest nationwide rail strike for 30 years has begun, leaving train passengers facing widespread disruption and cancellations as workers responsible for train lines and infrastructure across the UK walked out.

Industry leaders fear the economic disruption will be considerable, as travellers and commuters decide to stay at home, with strikes also planned for Thursday and Saturday.

Waterloo Station this morning, on the first day of national rail strike in London.
Waterloo Station this morning, on the first day of national rail strike in London. Photograph: Henry Nicholls/Reuters

Last-ditch talks yesterday failed to resolve the bitter dispute over pay, jobs and conditions, with all sides blaming each other for the lack of progress.

The RMT said train operating companies made a late pay offer yesterday, believed to be about 2-3%, with strings attached and no guarantees against compulsory redundancies. That’s a long way below inflation, which hit 9% in April.

Richard Burge, chief executive of the London Chamber of Commerce and Industry, warned that the capital “cannot afford a summer of chaos on the railways and tube lines”, given the slowing economy.

“While this strike will be damaging, a recession is looking likely regardless; as such, I wouldn’t pin an eventual recession on this strike.”

The agenda

  • 8am BST: Kantar’s report on UK grocery sector
  • 11am BST: CBI industrial trends survey of UK factories in May
  • 1.30pm BST: Chicago Fed National Activity Index
  • 3pm BST: US existing home sales for May


This website uses cookies. By continuing to use this site, you accept our use of cookies.