Business

Food price inflation dips for second month in a row

  • By Noor Nanji
  • Business reporter, BBC News

Image supply, Getty Images

The price at which meals costs are rising fell for the second month in a row in May however stays “incredibly high”, says analysis agency Kantar.

Prices had been up by 17.2% from a yr in the past in the 4 weeks to the center of May, down from 17.3% final month, it mentioned.

Food price rises are anticipated to ease additional later this yr, however Kantar mentioned a mean annual grocery invoice is now as much as £833 increased than a yr in the past.

Despite the pressures customers nonetheless stocked up for the Coronation in May.

Sales of wine, contemporary cream and pastry all soared as folks “got into the spirit” of the event and had a go at making the official Coronation quiche, Kantar mentioned.

Chancellor Jeremy Hunt met meals producers on Tuesday to debate the price of meals and look for methods to ease the stress on households. They agreed to maintain in contact.

Karen Betts, chief govt of trade group the Food and Drink Federation, mentioned producers had been absorbing prices, however price rises had been “unavoidable” as a consequence of rising costs for elements, vitality and labour.

Inflation is the speed at which costs are rising. A drop in inflation doesn’t imply costs are falling, however simply that the speed of will increase is slowing.

Food price inflation remains to be at a near-record excessive. Nevertheless, May’s slight fall was “without doubt welcome news for shoppers”, in response to Fraser McKevitt, Kantar’s head of retail and shopper perception.

He added that households had been discovering “different ways” to buy and lower your expenses, together with by opting for supermarkets’ own-brand equivalents. Supermarkets are additionally battling to supply worth to customers to lure them by means of their doorways.

“In the fierce contest for market share, eyes have been on the dairy aisle in particular, where the average cost of four pints of milk has come down by eight pence since last month,” Mr McKevitt mentioned.

“Prices are still much higher than they were 12 months ago, at £1.60 currently versus £1.30 last year, but retailers know just how important it is to offer even small savings on staple products like milk to get customers through the door.”

Image supply, Getty Images

Despite the price pressures, folks made the many of the additional financial institution vacation this month, Kantar’s analysis suggests, with an additional £218m passing by means of tills in the course of the week of the Coronation.

Sparkling and nonetheless wine proved common, with gross sales rising by 129% and 33% respectively.

People additionally stocked up on elements to make the official Coronation quiche with gross sales of chilled pastry hovering by 89%, whereas contemporary cream gross sales had been up by 80% and frozen broad beans by 57%.

“We’ll have to wait and see whether it becomes as much loved as its 1953 counterpart Coronation chicken and cements its place on the British picnic and garden party menu,” Mr McKevitt mentioned.

Rising meals costs are serving to to gasoline stubbornly excessive inflation, which hit 10.1% in the yr to March. The newest official figures on Wednesday are anticipated to point out inflation fell throughout April.

Food costs have surged in the final yr after hovering vitality costs drove up the price of manufacturing and provide chains had been disrupted.

Wholesale costs have been falling, however there’s a time lag earlier than that feeds by means of to costs on grocery store cabinets.

Patrick Coveney, chief govt of catering group SSP, which owns Upper Crust and Millie’s Cookies, advised the BBC’s Today programme he hoped inflation would ease this yr.

“My hope would be that as the very, very high levels of inflation that we’ve had begin to ease, you’ll begin to see that being reflected in reduced levels of price increases and perhaps even price deflation later in the year.”

However, after the International Monetary Fund gave its newest forecast for the UK financial system, the organisation’s managing director Kristalina Georgieva advised the BBC: “What is most concerning is food prices.”

Last week, the prime minister held a meals summit at Downing Street, and on Tuesday, the chancellor will meet meals producers to debate the persistently excessive costs.

How can I lower your expenses on my meals store?

  • Look at your cabinets so you recognize what you may have already
  • Head to the decreased part first to see if it has something you want
  • Buy issues near their sell-by-date which will likely be cheaper and use your freezer

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