Cost of living: Farmer discusses price increase of food
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The gloomy days ahead for shoppers are being blamed on the cost of raw materials and the impact of inflation rocketing as high as 7.2 percent. Asda chairman Lord Rose, a Conservative peer, insists the Government must do more to help tackle the expected surges.
And Steve Murrells, chief executive of Co-op supermarkets, pointed out: “The chicken industry has particular challenges because of the feed costs.”
He explained: “The majority of cattle raised in this country are fed grass and not required to have high-dense feed.
“But chicken, which was incredibly cheap and great value for money, is rising quicker than any other protein. It could become as expensive as beef.”
Poultry was last seen as a luxury in the 1950s. But Marks & Spencer free-range chicken breasts and organic British beef rump steak are now both £24.15 a kilo.
And Tesco Finest corn-fed free range chicken fillets are £16.50 a kilo, just shy of its £16.67-a-kilo Finest beef rump steaks.
Chicken prices jumped 19 percent in the two years to March, beef mince grew three percent.
But the National Farmers’ Union says the cost of rearing the birds leapt 50 percent in the past year alone.
Lord Rose told the BBC’s Sunday Morning programme: “It’s going to be very hard and I see no quick solution. Chicken feed is going up and all the other associated costs are going up.
“Pasta is made from durum wheat, and durum wheat has gone up in price, so that’s an inevitable cost increase.
“What we all now have to do is maybe change our behaviour. I will personally look at what things I need and what things I don’t need.
“The Government can’t sort out all the problems but it could talk to the food retailers to make sure that we are cutting out every extra cost.” The former M&S chief executive admitted tackling the problems will not be easy, saying: “All of us, need to think of ways to make this better. At the end of the day, sadly, the consumer will also suffer. We don’t know what will happen to gas prices and clearly that will be dictated by however long this war goes on for, but I am afraid there is a knock-on effect for all raw materials.
“There is going to be a new level of costs for these raw materials. It is a new high and that is something people are going to have to accommodate.
“What we are now going to have to think about is the long-term effect on inflation. The Government has got a very difficult and tricky road to navigate.”
Lord Rose claimed retailers “will do what we can” to shield customers from raw materials cost increases, but added they were “not immune from cost increases ourselves” and would pass them on.
Oil and gas were already surging before Russia’s war on Ukraine but that conflict has resulted in pushing prices even higher.
The invaded nation produced more sun- flower seeds than any other until this year but there is now a global shortage of sunflower oil. One of its by-products – soya – is often used in bird feed.
Meanwhile, wheat prices are up 35 percent year on year and palm oil 40 percent, both used across a huge range of foodstuffs. A resurgence of Covid in China has also blocked supply lines of other goods.
Producer prices for core staples, such as milk and pork, climbed 20 percent by the end of March and are hitting consumers now. Tesco will pass on to shoppers this month the milk increase.
Across all supermarkets, the bill for butter will leap by a fifth in the next few weeks – and by a staggering 60 percent by the end of the year.
Kwasi Kwarteng insisted uncontrolled inflation would not necessarily go on for years but admitted no one knows when it will peak.The Business Secretary said: “It’s a global issue – every economy in the world is looking at high prices and greater inflation.”
He claimed the Government is “dealing with it by creating jobs” and the “energy security strategy” – including new nuclear and offshore wind power generation – could help to arrest surges in energy prices.
Charles Hall, head of research at retail analysts Peel Hunt, said: “The 30-year improvement in living standards due to stable and reducing food prices is reversing.
“Food is returning to a material proportion of consumer spend as inflation is likely to top 10 percent. This will result in a sharp increase in food poverty in the UK.”
How to bag big savings on the shopping run
SEARCH DIFFERENT AISLES – AND LOOK UP AND DOWN: Consumer champion Which? found some products, such as rice and chickpeas, can be cheaper in the world foods aisle and sultanas and cashew nuts often cost less in the baking section. Supermarkets often place less profitable items high and low on the shelves and the ones they want to promote at eye level.
AVOID CONVENIENCE STORES: It isn’t an option for everyone, but it could save you hundreds each year. Analysis of the average prices of 48 items Tesco Express and Sainsbury’s Local found the highest weekly price difference between Sainsbury’s and its convenience counterpart was £10.20, or £322 over a year. And a basket of Tesco Express groceries cost average £279 more over a year than in its main stores.
SHOPPING AROUND COULD SAVE £9.21 PER BASKET: It often pays to look in different supermarkets for the best prices. In March, Lidl was named the cheapest supermarket – a basket of 21 groceries cost an average of £26.83 compared with £36.04 for the same or equivalent items from priciest Waitrose.
DON’T DISMISS OWN BRANDS: Supermarket ownbrand products can be a lot cheaper than the big names. Which? found in blind taste tests that they are not only cheaper but sometimes taste better than their well-known brands. Tests on essentials such as beans, orange juice, honey nut cornflakes and coffee revealed shoppers could save a packet without compromising on taste. Switching from Innocent orange juice (£3.60 for 1.35 litres, 27p per 100ml) to Aldi’s The Juice Company smooth orange juice (£1.69 per 1.75l carton, 10p per 100ml) could save nearly £100 a year.
STOCK UP WHEN YOU CAN: Grocery prices can vary from week to week, fluctuating by up to 284 percent. Which? exposed pricing secrets in 2021 when Asda almost always beat its rivals on the cost of branded groceries, while at five of the big supermarkets it found you could pay almost four times the amount for the same product on some days than others. “Yo-yo” pricing means it is often worth stocking up when items you buy regularly are discounted. This approach can work particularly well for store cupboard items and products that can be frozen.
GET REWARDED FOR YOUR SPENDING: Sign up for supermarket loyalty schemes. Many offer exclusive discounts, rewards, charity donations and competitions to loyal customers. People can save between 50p (with Sainsbury’s Nectar) and £5 (Iceland) for every £100 spent when using a loyalty scheme. However, that could easily be cancelled out if the shop’s prices are higher than those of its competitors. So while it’s always worth signing up to schemes offered by shops you already use, you probably shouldn’t change where you shop just to earn points.
DON’T BE DUPED BY DISCOUNTS: Stores often place vertical signs with offers on in the middle of the aisle, with the intention of catching your eye. While special offers can be helpful, they can entice you to buy items you hadn’t intended. When working out whether the price is actually decent, look at the unit or “per 100g” cost rather than the overall pack price. It’s also worth noting that “value packs” don’t always offer the best deal. Sometimes buying two packs of five is actually cheaper than one pack of 10.
WRITE A LIST AND STICK TO IT: Supermarkets purposefully spread different types of groceries across different sections to make sure customers walk past as many shelves as possible. Making a list and trying not to be distracted by other products is an easy way to save money, but it can be more difficult in unfamiliar stores. In most, dairy products and bread can be found at the back, fruit and vegetables at the front and drinks and frozen items at the far end.
TRY SHIFTING DOWN A RANGE: There are usually a number of different ranges of own-label products, from basic and value brands to premium. There are decent savings to be had by moving down a tier – and often the budget option tastes just as good.
BE FLEXIBLE WITH BESTBEFORE DATES: Food with a use-by date must be used by midnight of its expiry date or it could be unsafe. Best-before dates are far more flexible and don’t have the same safety issues. Food near or even after its best-before date is usually fine to eat and often heavily discounted. If you find something in the cupboard past its best-before date, give it a sniff. If it smells fine, it should be OK to eat.
Pantry Basics weigh heavier on pocker
A WEEKLY shopping basket survey among the biggest grocery chains found food prices were a hefty 7.2 percent higher overall than a year ago.
And the research showed price bills at one leading retailer were far greater still – with the same staples costing 12.3 percent more than a year earlier.
Each week trade magazine The Grocer surveys the price of a basket of 33 everyday products on the shelves of five major supermarkets: Tesco, Asda, Sainsbury’s, Morrisons and Waitrose. This week it included occasional entry Iceland too. In its latest report, The Grocer said: “Inflation reared its ugly head this week with Asda cheapest for the second week on the trot.”
It added: “There was little evidence yet of the sweeping price cuts announced by Asda and Morrisons this week – the cost of our shopping list was up 7.2 percent compared with April 2021.
“And it was guest retailer Iceland – in particular – that struggled to keep a lid on price rises, with its total 12.3 percent higher than a year ago.”
The basket price comparison found Iceland’s hikes were worse than Sainsbury’s, which was 8.2 percent pricer than last year. Asda shoppers were stung for 8.1 percent more, Morrisons 7.8 percent and Waitrose 4 percent.
Tesco was 2.7 percent costlier than 12 months ago.
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