UK food inflation climbs to a record high of 13.9% in September
Rising inflation sent household food costs sharply higher in September, adding £643 to the average annual bill, according to new data.
A growing number of Brits are also switching to cheaper, imperfect products and own-brand goods because of the added financial pressure, research firm Kantar said on Tuesday.
Food inflation rose to 13.9 percent last month, the highest since records began in 2008, the Kantar study showed.
Official figures showed that food and non-alcoholic beverage inflation rose to 13.1 percent in August, up from 12.6 percent in July and the highest level since the Office for National Statistics began recording in 1988.
UK inflation data for September will be released next week. Benjamin Nabarro, Citi’s chief UK economist, has forecast headline inflation to have risen to 10.2 in September from 9.9 in August.
The new data comes as the IMF sharply downgraded the UK’s economic outlook on Tuesday.
The IMF forecasts that the economy will largely stagnate next year due to higher inflation and rising borrowing costs after further monetary tightening by the Bank of England.
Borrowing costs skyrocketed after the government announced its tax-cutting “mini” budget on September 23.
Nabarro is more pessimistic than the IMF on the UK outlook, forecasting that the economy will contract in 2023 and 2024, mainly due to a fall in household spending.
According to the Kantar data, consumers are already cutting their budgets as they have faced near-record price pressures for a generation.
The research showed that the average household can expect their annual grocery bill to rise to £643 or £5,265. At basket level, this amounts to an additional £3.04 over the typical grocery store, which was around £21.89 last year.
Fraser McKevitt, Kantar’s head of retail and consumer insight, said the data shows how the cost-of-living crisis is “still hitting people hard.”
Consumers are buying imperfect products to cope with price increases, Kantar noted, as sales of ranges like Tesco Perfectly Imperfect and Morrisons Naturally Wonky rose 38 percent annually.
Brits are also turning to supermarkets that offer cheaper items. Asda brought another 417,000 customers through its doors in the last three months. Meanwhile, affordable brands Aldi and Lidl reported strong sales growth.
This was offset by a decline in sales at Morrisons and Waitrose, which offer higher value products.
Kantar bases its research on a year-to-year comparison of more than 75,000 products.
There has also been a growing appetite for private label as consumers turn away from more expensive products.
Private label sales rose at an annual rate of 8.1 percent in September, while branded items fell 0.7 percent, Kantar reported.
McKevitt said Brits are “quite adept at finding the best value for money and retailers are expanding their ranges to help them do that”.
https://www.ft.com/content/5a91a3c9-edc9-4241-aa07-cf55712057c7 UK food inflation climbs to a record high of 13.9% in September