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21 May 2022

The truth about food inflation

Which? has crunched more than 1.9m prices to reveal which groceries are rising in price fastest

You don't need to be an economist to know food and drink prices are rising sharply - anyone doing a regular supermarket shop will have felt the pinch at the checkout.

The news is full of headline inflation figures this week, but these only tell part of the story. Inflation isn’t one-size-fits-all and varies significantly depending on what and how you buy. 

So which groceries are rising in price the fastest? How are shoppers on different budgets affected? And how does inflation compare across supermarkets? 

Which? crunched more than 1.9m prices to reveal the hidden truth about food inflation – and uncover the areas where supermarkets can do more to support households dealing with these unprecedented price hikes. 

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The groceries with soaring prices

Our statisticians analysed the prices of more than 21,000 groceries across two years – comparing their average prices at eight major supermarkets between December 2021 and February 2022 with the same period two years previously. 

We found grocery inflation was 3.14% on average – but this masked huge changes in some prices. Some 265 groceries had price rises of more than 20%, for example. This group of items included:

  • Kellogg’s Crunchy Nut Corn Flakes Cereal (500g) - up 21.4% at Tesco
  • Own-Label Closed Cup Mushrooms (250g) - up 21.4% at Asda
  • Cathedral City Extra Mature Cheddar (350g) - up 21.1% at Ocado.

Fizzy drinks had the biggest price rises at 5.85% on average. This was followed by butters and spreads (4.9%), energy drinks (4.8%), and milk (4.6%). Meanwhile, groceries with the lowest inflation on average included chocolate (1.4%), fresh fruit (1.6%), biscuits (1.8%) and vegetables (1.9%). 

Why is inflation running so high? 

Inflation is the highest it’s been for decades. Most economists agree this is a result of the world economy opening up again after the pandemic, and a sign that demand is outstripping supply. 

Other factors – labour shortages, supply issues and administrative burdens – have also played a part. And now the war in Ukraine is likely to send prices soaring further and for longer with commodities such as wheat, fertiliser and sunflower oil particularly affected. 

Why are there different inflation figures?

While we found inflation on our 21,000 groceries was 3.14% on average, other ways of measuring inflation result in different figures. 

According to market analysts Kantar, take-home food price inflation was at 5.9% in April (compared to the same four weeks a year earlier). This was the highest rate since December 2011. 

Kantar's figure is based on more than 75,000 identical products compared year-on-year in proportions bought by British shoppers. It covers more products that our analysis but over a shorter time.

Meanwhile inflation overall – including other items and not just groceries – was running at 9% in April, and the Bank of England expects it to go even higher later this year. 

No matter how you measure it, we know 69% of people have been affected by increased food prices recently. 

Our survey* found 43% of people bought cheaper groceries in response to rising prices and 35% bought extra items when they were on promotion. Some 34% shopped around in other supermarkets, different stores or online. 

Worryingly though, 19% have gone without some foods, 10% have skipped meals, 7% have prioritised meals for other family members and 3% have used a food bank. 

Which supermarket has the fastest rising prices? 

Increasing the shelf price of groceries is just one way for supermarkets to manage inflation. In fact, it’s usually a last resort. 

Fewer discounts, smaller products (at the same price) or smaller savings on sale items are some of the tactics they use. And of course, some supermarkets and some lines of products will be able to absorb some increases in costs before passing them on to shoppers directly. 

We looked at how inflation varied between different supermarkets – and the results may surprise you. 

Morrisons had the highest inflation on the products we analysed across two years, at 4.08%, followed by Asda (3.97%), Tesco (3.48%), Aldi (3.2%), Sainsbury’s (3.07%), Lidl (2.92%), Ocado (2.9%) and Waitrose (1.61%).  

SupermarketInflation rate over two years
Sainsbury's 3.07%

Different supermarkets have different supply chains and contractual obligations which may mean some find it easier to minimise costs than others. Morrisons is the UK’s largest fresh food manufacturer which may mean it finds it harder to switch suppliers than some other supermarkets. In April it warned its profits were likely to take a significant hit this year due to inflation and supply issues.

Are promotions as good?  

Our investigation also found the number of promotions has reduced dramatically over the past two years across almost all items – and the size of saving offered has also been cut.

We found fewer promotions in every one of the 20 categories of popular-selling groceries we looked at – with the number of discounts on bottled water down 14.7%, vegetables down 11% and energy drinks down 10.8%. 

We also found the saving offered in those promotions that did still happen was less in three-quarters of the categories we looked at. This was most pronounced for butters and spreads where the depth of the saving was reduced by 3.59% across the two-year period, followed by vegetables (-3.45%) and crisps (-2.88%). 

What about shoppers on a budget?  

Shoppers’ personal inflation will depend on what they buy, when they buy, where they shop and a range of other factors. People with the ability to shop around, buy in bulk and adapt their behaviour are likely to be able to control how much inflation affects them more than those who can’t. 

So we looked at how inflation has affected different ranges of own-label groceries. 

Happily, own-label budget ranges had the lowest level of inflation, at just 0.2%. Standard ranges rose in price by 2.84% and the highest inflation was seen in own-label premium ranges which saw 3.15% inflation across the two years our investigation focused on. 

Again, it’s not simply about price though. Whether those budget items are in stock, at an easily-accessible store at the right time will also play a big part in making those lowest prices available to those who need them. 

To see whether availability might be an increasing issue, we looked at how often budget own-label items were out of stock. We found they were out of stock on three times as many days during the most recent three-month period, compared to two years prior. 

The sneaky tricks of shrinkflation

One of the ways supermarkets and manufacturers try to disguise rising costs is by reducing the size of groceries – without cutting the price. 

Often the packaging looks so similar in size most shoppers wouldn’t even notice. Of course, even a small reduction in size can actually work out as a big inflationary increase.

Here are some examples we found: 

  • Nescafé Azera Americano decaff instant coffee shrank from 100g to 90g in Tesco in February this year but stayed priced at £5.49 - an increase of 11% to shoppers per 100g  
  • Persil non-bio washing powder went from 40 washes (2.6kg) to 37 washes (1.85kg) at Tesco, Asda and Morrisons early last year but stayed the same price
  • Surf Tropical Lily Ylang Ylang washing powder went from 40 washes (2.6kg) to 39 washes (1.95kg) at Tesco without dropping in price 
  • Walkers Classic Variety Crisps went from 24 bags in a multi-pack to 22 bags Tesco, Asda and Morrisons last autumn, while (you’ve guessed it) staying the same price.

Unilever told us it had reformulated the Persil and Surf to make them more concentrated. 

Can I beat inflation? 

Inflation isn’t due to subside in the short term. 

It’s not just food prices that are rising sharply. Petrol and diesel prices are at record highs and energy costs have rocketed. 

Many price increases in shops are being staggered because manufacturers generally ‘hedge’ costs by buying supplies in advance at lower prices. But these short-term arrangements will start to unravel over the coming year with further costs inevitably being passed on to households.

There are ways you can control the amount it affects your grocery bill with our tips on how to spend less at the supermarket – from signing up to a loyalty scheme to choosing own label over branded groceries and avoiding convenience stores. 

But those who can make changes such as switching supermarkets or shifting down a range in own-label products are the lucky ones: there are many people who aren’t able to do so. And for those people who need the most support it’s more important than ever that they are able to access help easily and quickly.

Which? believes supermarkets and manufacturers must provide clear unit pricing so consumers can choose the best value items.  For example, a clear and legible unit price - such as cost per 100g or 100ml - allows people to compare the value for money of different pack sizes, ranges or brands. 

We also think supermarkets should ensure that budget ranges are readily available across their stores so consumers are not forced to pay over the odds for everyday items.

*The fieldwork was conducted by Yonder on behalf of Which between 11th and 13th February 2022. A sample of 2,088 consumers was surveyed online and weighted to be nationally representative.

This story was first featured in June's Which? magazine. You can listen to the article in full via the Which? Shorts podcast.