UK Food Prices Soared 15.7 Percent in April but Predicted to Fall in Coming Months

A customer shops for meat at a Sainsbury's supermarket in Walthamstow, east London, on Feb. 13, 2022. Tolga Akmen /AFP via Getty Images

Food inflation in the UK reached 15.7 percent in April, the highest on record, but business experts say food prices should begin to fall in the coming months.

According to the latest BRC-NielsenIQ shop price index, food inflation rose to 15.7 percent last month from 15 percent in March.

The inflation was even higher for fresh foods, prices of which increased by a record 17.8 percent year-on-year for the month.

But Helen Dickinson, chief executive of the British Retail Consortium (BRC), said on Tuesday that food prices should begin to fall in the coming months as retailers pass on their cost savings.

The logos of the UK's leading supermarkets Lidl, Asda, Sainsbury's, Waitrose, Tesco, Aldi, and Morrisons, are displayed outside various branches in Bristol, England, on Nov. 18, 2015. Matt Cardy/Getty Images

It comes at a time when the overall retail inflation has begun slowing down.

The fresh figures reported shop price inflation of 8.8 percent in April against the same month a year earlier, easing slightly from 8.9 percent in March.

Non-food stores recorded inflation of 5.5 percent for the month, slipping from 5.9 percent in March as shops reduced prices in a bid to attract customers.

‘Knock-On Effect’

Dickinson said: “Overall shop price inflation eased slightly in April due to heavy spring discounting in clothing, footwear, and furniture. However, food prices remained elevated given ongoing cost pressures throughout the supply chain.”

She said ready meals have become more expensive as a result of the “knock-on effect from increased production and packaging costs.”

Meanwhile, coffee prices have risen further “due to the high cost of coffee beans, as well as key producer nations exporting less.”

But she said the price of butter and vegetable oils started to come down as retailers passed on cost savings from further up the supply chain.

Dickinson added that shoppers “should start to see food prices come down in the coming months” amid reductions in wholesale prices and other costs.

Mike Watkins, head of retailer and business insight at NielsenIQ, said: “In recent weeks, more retailers have used loyalty schemes or money off promotions to help stimulate sales.

“However, with inflation yet to peak and sales volumes in decline in many channels, it’s difficult to second guess the strength of consumer confidence.”

Inquiry Called For

Also on Tuesday, the opposition Liberal Democrats said an inquiry should be commissioned into whether supermarkets have been “profiteering” during the cost-of-living crisis.

Party leader Sir Ed Davey is calling for the competition watchdog to start an investigation into whether food retailers put up the price of goods by more than was necessary to cover the cost of rocketing inflation.

Liberal Democrat leader Sir Ed Davey (right) makes a speech to local activists alongside Liz Jarvis, the Liberal Democrat parliamentary candidate for Eastleigh (left), during a rally at the bandstand in Eastleigh, England, on April 27, 2023. Andrew Matthews /PA Media

Analysis by the party suggests a typical weekly family food shop has increased by £12 as a result, leading to a higher annual bill of more than £600 for the average household.

With prices going up, the Lib Dems said that the big supermarket chains had made billions of pounds in profits over the past year.

Tesco and Sainsbury’s—which account for nearly half the UK’s grocery market, according to retail research group Assosia—saw their combined profits rise to £1.5 billion in 2022, a rise of more than 50 percent on last year, according to Lib Dem number-crunching.

The Lib Dems want the Competition and Markets Authority to probe whether profiteering has taken place among big supermarkets and food multinationals.

Davey is also pushing for tougher rules to prevent retail giants from raising the price of essentials more than necessary.

He said: “British farmers will not see any extra income from these soaring food prices. These food prices benefit absolutely no one but the supermarket giants.

“We need to bring soaring food prices back under control and offer relief to families. That means cracking down on profiteering by food multinationals and the big supermarkets so customers get a fair deal.”

‘Cost Pressures’

But the BRC said that retail businesses are “working hard to limit price rises for customers.”

Andrew Opie, the body’s director of food and sustainability, said: “Supermarket costs continue to climb in the face of high energy bills, transport costs, and labour shortages, as well as higher prices demanded by food manufacturers and farmers.

“Retailers are working hard to limit price rises for customers and margins remain squeezed as they compete for market share. To help those impacted by the high cost of living, supermarkets have expanded their affordable food ranges, fixed the price of many essentials and offer support to vulnerable groups.”

“When the cost pressures facing retailers do eventually ease, retail prices will follow fast as they fiercely compete for market share,” he added.

PA Media contributed to this report.