While overall inflation declines, food prices remain high due to increased production costs and supply chain disruptions. Recent statistics reveal changing shopping habits and varied price trends across essential items.
Food Price Inflation and Ongoing Market Trends in 2024
Decrease in Overall Inflation: According to the Office for National Statistics, overall inflation has begun to decline after a significant rise during the coronavirus pandemic. However, specific supermarket items continue to experience substantial price increases.
Persistent Food Price Inflation: While the rate of food price inflation is falling, it remains higher than general inflation due to increased costs for feed, fertilizer, and fuel, exacerbated by the war in Ukraine and pandemic-related disruptions. Additionally, energy and labor costs have surged, contributing to higher food production expenses.
Impact of Weather and Disease: Poor agricultural yields in Europe and North and West Africa have affected the production of essentials like cocoa and sugar. Bird flu has also led to a decline in egg production.
June 2024 Grocery Price Changes: Grocery price inflation fell to 1.6% in June 2024, the lowest since September 2021. This period saw a 2% increase in supermarket visits compared to the previous year. Branded product sales rose by 3.6%, surpassing own-label products at 2.7%.
Changing Shopping Habits: Shopping trends have evolved with a rise in items like popcorn, peanut butter, and chilled vegetarian products. Premium ground and bean coffee have become more commonplace.
Price Increases for Specific Items:
1. Vitamins/Minerals/Supplements: Prices have surged due to higher production costs and raw ingredient prices, including a significant rise in fish oil prices from South America.
2. Chilled Fruit Juices and Drinks: Consumer group Which? reported a 6.5% price increase for energy drinks, water, fizzy drinks, juice drinks, and smoothies. The shortage of oranges in South America has particularly impacted orange juice prices.
3. Vegetables: Extreme weather has led to reduced supply and higher costs for vegetables, with prices increasing by 5.2% in the past year.
4. Olive Oil: The price has more than doubled, from £3.45 for a 500ml bottle in January 2021 to around £7.45 today.
5. Deodorants: Prices have risen by 59% from February 2020 to February 2024 due to increased manufacturing and distribution costs.
Recent Price Declines: On the other hand, toilet tissue, butter, and dog food are seeing the fastest price reductions, credited to easing input costs such as energy and fertilizers.
Industry Insights
- Agriculture and Horticulture Development: According to Susie Stannard of the Agriculture and Horticulture Development Board, falling energy and other input costs are beneficial for dairy product manufacturing, leading to stabilized milk and butter prices since July 2023.