Food inflation expected to rise as high as 17 – 19% in early 2023


The cost of food and drink is expected to continue to rise into next year, with the rate of grocery inflation reaching a peak of 17 – 19% in early 2023 before beginning to slow down over the coming 12 months.

The latest forecast from grocery insight provider IGD suggests that while food inflation will broadly affect most food and drink products, the most pressure on household budgets will come from meat, fruit and vegetables, dairy and bread.

Speaking at today’s Insight & Impact 2022 conference in London, IGD chief economist James Walton said that IGD expects inflation to above zero at the end of 2023, although price reductions may occur beyond that point if market conditions permit.

Harvests in 2023 and the value of sterling will be key factors.

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The news comes as Kantar revealed that grocery price inflation has hit a record 14.7%, adding a potential £682 to the average annual cost of a typical basket.

In June of this year, IGD initially calculated that food inflation would likely accelerate until autumn 2022, peaking at 14-16%, then dissipate by mid-2023.

However, major strategic changes have affected the food supply chain since June, including significant input cost pressures, a tight labour market, continued supply chain disruption and the ongoing war in Ukraine.

Walton said the news was a “daunting prospect for both households and businesses”.

“Already we can see the food industry pulling together and retailers putting themselves in the shoes of shoppers to understand how best they can support them during this difficult time. While it’s clear that there are considerable global and UK-specific economic headwinds ahead, there is some light at the end of the tunnel, with food inflation expected to dissipate slowly during 2023.

“Consumers will be looking to the food industry to keep prices affordable. We know that inflation will eventually come to an end, and we will start to see significant drivers of overall inflation begin to drop off over the coming months.

“Food businesses will need to focus on maximising efficiency to deliver the best possible prices for shoppers and look for opportunities to bring prices back down, as soon as possible.”



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