This Is Why Our Food Bills Are Set To Climb (Even Though We're Buying Less)

The yearly amount we spend on groceries could rise by an average of £271, according to new research.
The cost of living crisis has just hit the supermarkets, too
SolStock via Getty Images
The cost of living crisis has just hit the supermarkets, too

The average food shop in the UK could soon increase by £271 per year, adding yet more pressure to the growing cost of living crisis.

This prediction is based off new research from data analytics company Kantar, which said our groceries are now 5.9% more expensive than they were back in April 2021.

So why are they changing – and can we do anything about it?

Why are food bills climbing?

Kantar’s head of retail and consumer insight Fraser McKevitt said people are having to spend more on “non-discretionary, everyday essentials which will prove difficult to cut back on as budgets are squeezed”.

This comes down to several, complicated issues which have contributed to the current cost of living crisis.

The Ukrainian war is playing a significant role in reducing the available food resources, as distribution lines from Ukraine and Russia face major disruption to mainstream items such as cooking oil.

Prices everywhere in the UK are also rising at their fastest rate for 30 years due to inflation, as companies pass their growing production and distribution costs onto customers.

For instance, Nestlé , the food and drink giant, has increased all of its prices by more than 5% in the last three months.

The prices of various items such as dog food, fresh lamb and savoury snacks are on the up as well, according to Kantar, while previous reports have pointed out how basics like meat, coffee and pasta are getting more expensive.

Milk is set to become more expensive because the cost of feeding cattle rising – this comes down to the climbing costs of labour and oil, which then affects energy bills.

The knock-on effect of Covid and the so-called Great Resignation has led to staff shortages too, while Brexit also meant a significant portion of the workforce left the UK.

On top of all of this, various weather conditions in some parts of the world can be blamed. Drought and high temperatures have affected various crops such as wheat and rapeseed, reducing farmers’ yield so less produce reaches the shelves.

People are choosing budget supermarkets instead

Kantar pointed out that Aldi has become the fastest growing retailer this year, with its sales increasing by 4.2% in the three months leading up to April 17. Hot on its heels was fellow cost-cutting supermarket Lidl, which saw a 4% climb in sales.

The researchers found that more than one million additional shoppers hit these two supermarkets compared to April 2021 – news which comes just after Morrison and Asda vowed to cut prices on hundreds of their items as they look to regain customers.

Iceland boss Richard Walker has also told the BBC he is looking at introducing an influx of deals to help the public with the cost of living crisis.

Cooking oil on shelves in a Tesco store in Ashford, Surrey
Steve Parsons - PA Images via Getty Images
Cooking oil on shelves in a Tesco store in Ashford, Surrey

How is this affecting supermarket sales?

Kantar pointed out that there is evidence of people stocking up due to limited availability.

Tesco, Waitrose and Morrisons have even put a limit on how much cooking oil people can buy, as most of the UK’s sunflower oil comes from Ukraine.

Walker – from Iceland – told BBC Radio 4′s Today programme: “It is not as frenzied as the toilet roll panic buying from a couple of years ago, and we are managing to maintain an offer.

“But yes, we are limiting purchases and we’ve moved into smaller packs to allow existing stocks in the market to service more customers.”

Despite this clear demand, supermarket sales have actually fallen by 0.6% compared to the profits seen during the first lockdown, a time when only essential shops were open.

Online grocery sales have dropped by almost 15% when compared to last year when social distancing restrictions were still in place.

People are thought to be buying less now that the hospitality industry has opened up once again.

McKevitt said this is to be “expected”, adding: “While the number of trips we’re making to the supermarket has remained steady this year, people aren’t buying as much when in store and the average basket size has dropped by 4.5% to £22.39.”

Does the government have a plan?

Boris Johnson did call a cabinet meeting on Tuesday to redirect the government’s focus away from partygate and onto the cost of living crisis.

However, chancellor Rishi Sunak is reportedly reluctant to spend any more to help the public with their bills, so it would appear a solution is yet to be found.