The Herald

Squeeze on families as supermarke­t prices soar by over 20%

- By Martin Williams

CONSUMERS have been hit with “shocking” price rises of more than 20 per cent on hundreds of popular items over the past two years that are putting increasing pressure on household budgets.

New research has found a drop in the availabili­ty of supermarke­t discounts and budget ranges compared with two years ago as the cost-of-living crisis continues to bite.

It found the price of 265 groceries shot up by more than a fifth over the last two years.

The investigat­ion by the consumer organisati­on Which? said the list of items included Kellogg’s Crunchy Nut Corn Flakes Cereal 500g, which increased by 21.4% in price at Tesco; Asda’s Own Label Closed Cup Mushrooms 250g, which rose 21.4%; and Cathedral City Extra Mature Cheddar 350g, which increased by 21.1% at Ocado.

Which? analysed the price of more than 21,000 groceries over two years, comparing their average prices at eight major supermarke­ts between the start of December 2021 and the end of February 2022 with the same period two years previously. Across 20 categories of groceries, fizzy drinks saw the biggest average price rise at 5.9%, followed by butters and spreads (4.9%), energy drinks (4.8%) and milk (4.6%).

Groceries with the lowest inflation included chocolate (1.4%), fresh fruit (1.6%), biscuits (1.8%) and vegetables (1.9%).

Prices have been rising at the fastest rate in 40 years as inflation in the UK was confirmed to have hit 9% last month.

The increase means inflation is at its highest level since 1982.

However, according to official figures, alcohol, tobacco and summer clothes drove an increase in sales for retailers last month, though many were forced to increase their prices.

Customers flocked to supermarke­ts to buy more cigarettes and alcoholic drinks, but spent less in non-food shops.

The UK’S retail sector saw a 1.4% rise in sales over the month, after contractin­g in March, data from the Office for National Statistics show.

The Which? study also found that

across different supermarke­ts there have been fewer discounts, limited availabili­ty of own-label budget ranges and products decreasing in size but remaining the same price over the same period.

The number of promotions fell across every one of the 20 categories the watchdog studied, including the number of discounts on bottled water down 14.7% and on vegetables down 11%.

Meanwhile, the size of savings in promotions that did still happen were also cut in three quarters of the categories.

This was most pronounced for butters and spreads, where the size of savings fell by 3.6% over the two years, followed by vegetables (3.5%) and crisps (2.9%).

Examples of “shrinkflat­ion” – reducing the size of products while maintainin­g their original price – included Nescafe Azera Americano decaffeina­ted instant coffee shrinking from 100g to 90g and Walkers Classic Variety crisps dropping from 24 bags in a multipack to 22 bags.

The investigat­ion also found that own-brand budget ranges – which have seen the lowest level of inflation, at just 0.2%, compared to 3.2% for own-label premium ranges – have become less available.

During the most recent threemonth period, budget own-brand items were unavailabl­e on three times as many days as two years previously, according to the study.

Of the 20 product categories, own-brand cheese was out of stock the most at 17 days in 2022 compared to six days in 2019.

The consumer organisati­on is calling on supermarke­ts and manufactur­ers to provide clear unit pricing to allow consumers to easily compare and choose the best value items – such as cost per 100g or 100ml – and ensure that budget items are readily available.

Sue Davies, Which? head of food policy and consumer rights, said: “Our research reveals eye-watering price rises are being exacerbate­d by practices like shrinkflat­ion and limited availabili­ty of all-important budget ranges – and these factors are combining to put huge pressure on household shopping budgets.

“During an unrelentin­g cost-ofliving crisis, consumers should be able to easily choose the best value product for them without worrying about shrinkflat­ion or whether their local store stocks budget ranges.”

A Tesco spokesman said: “We are committed to providing great value for our customers, whether it’s promising ‘Low Everyday Prices’ on 1,600 staples, price matching around 650 basics to Aldi prices, or offering exclusive deals and rewards through thousands of Clubcard prices.”

The Office for National Statistics said that its figures still show a continued longer-term downward trend in retail sales.

“April’s rise was driven by an increase in supermarke­t sales, led by alcohol and tobacco and sweet treats, with off-licences also reporting a boost, possibly due to people staying in more to save money,” said Heather Bovill, deputy director for surveys and economic indicators.

“Clothing sales had a strong month, especially online, with some retailers suggesting consumers were purchasing clothes for summer holidays and weddings. The most recent inflation figures showed a massive spike in the cost of living, especially in April as energy bills spiked.

Measured by the Consumer Prices Index, inflation hit 9% in the year to April.

David Baker, chief investment officer at consultanc­y Mazars, said retailers who are being forced to pass on their increased costs to customers will be somewhat reassured by April’s figures.

“The reading contradict­s recent consumer confidence data and suggests that near full employment and the ability of consumers to tap into savings accrued during the pandemic may be preventing shoppers becoming overly cautious despite the cost of living challenges associated with high levels of inflation,” he said.

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