UK Grocery Prices Reach Record High, Exacerbating Cost of Living Crisis

The cost of living crisis continues to worsen in the UK, as grocery prices reach a record high, according to a recent report by research firm Kantar.

Students and people living on low incomes are struggling with food basics. 

The report from Kantar revealed that grocery prices rose by 17.1% in the four weeks to 19 February compared to the same period the previous year, which is the highest rate since Kantar's records began in 2008. The soaring prices are largely due to the rising costs of milk, eggs, and margarine. As a result, one in four shoppers are now facing financial struggles.

It also highlights the impact of these rising prices on households, with Kantar estimating that if shoppers don't change their habits, they will face an £811 increase in their annual grocery bill. Basic goods have almost doubled in price over the past two years, with a standard 500g bag of pasta now costing 95p compared to 50p two years ago.

The cost of a small basket of 15 everyday essentials has gone up by £5.34, from £15.79 in 2021 to £21.13 in 2023.

Fraser McKevitt, Head of Retail and Consumer Insight at Kantar, says, "Shoppers have been facing sustained price rises for some time now, and this is having a big impact on people's lives. Our latest research shows that grocery price inflation is the second most important financial issue for the public behind energy costs."

The report also reveals that shoppers are turning to supermarket own-brands to save money, with sales of own-brand goods up 13.2% in February compared to a 4.6% rise in branded goods. The discount supermarket chains, Aldi and Lidl, have seen rapid growth over the past year, with sales up by more than a quarter.

Brexit has had an impact on the food industry in the UK, particularly with regards to trade and regulations. The UK's exit from the European Union has resulted in increased bureaucracy and customs checks, which have slowed down the import and export of goods. This has led to delays in the transportation of perishable goods, such as fresh produce, and has contributed to supply chain disruptions and shortages.

The cost of living crisis is not only affecting grocery prices but is also impacting other areas, such as energy costs. Kantar's research found that grocery price inflation is the second most important financial issue for the public behind energy costs. The pandemic has also impacted online shopping habits, with online retailer Ocado reporting that customers on average bought fewer items last year than they did the year before, although this was the same amount as before the pandemic. Despite this, Ocado's UK joint venture with M&S, Ocado Retail, has shown resilience by increasing online market share and growing customer numbers.

While Brexit has had an impact on the food industry in the UK, it is not solely to blame for the current food crisis. Rising food prices and supply chain disruptions have been primarily caused by a combination of factors, including global supply chain issues, weather events such as droughts and floods, and changes in consumer behavior.

The rising cost of living in the UK is putting a significant strain on households, with many struggling to make ends meet.

As prices continue to rise, it is important for shoppers to adapt their shopping habits and consider more cost-effective options to help alleviate the financial burden.