Food that some people usually see as a necessity such as bread and pasta, have soared in price by 25% in the last 2 years.
In May, the annual rate of increase for all types of food hit 4.9%. The increase was driven by the boost in cost of commodity crops such as corn and wheat. The British Retail Consortium (BRC) has said that it is the droughts throughout many parts of Europe that have added to the cost, as there has been a slowdown of the crops growing.
Stephen Robertson, BRC director general, explains that “The recent instability in the price of key commodities such as bread, which is linked to global demand and dry weather, is now making its way through to other foods throughout shops”.
As the cost of animal feed is more expensive, it has a knock-on effect on the cost of dairy products, eggs and meat.
Many households have already started cutting down the amount of groceries they buy from supermarkets and official figures show households are making serious changes to their shopping habits. Figures show that supermarket own-branded bread and pasta has increased by 25% as wheat prices are up by 72% in a year. Snacks, cooking oil and processed food have increased as corn prices have raised by 112% in a year.
Restaurants are feeling the struggle to get people to eat out at their establishments. We have seen many businesses offering 2 for 1 meal deals and other special offers to try and entice people to eat out. Not only has supply prices increased for restaurants, but so has gas, commercial restaurant insurance and electricity bills which has all had an effect on the general running costs of restaurants.
Supermarkets have also resorted to promotions to keep customers coming to their stores, according to retail analysts Nielson.
Senior manager for retailer services, Mike Watkins, said “Due to weather related or seasonal fresh foods, prices have increased this month.
“Retailers are offering deeper price cuts and an increase in promotions, as other rising bills such as gas and electricity is still more of a priority to shoppers”.
However, as many of us feel the squeeze on our household budgets and spending, low cost supermarkets such as Lidl and Aldi has seen an increase in sales.