Some of the UK’s leading grocery retailers have warned that food price rises will last until “the back end of the year” as inflation remains high.
The Office for National Statistics data revealed today (15 January), that inflation fell 10.1% from 10.5% in December 2022, however prices continue to put a strain on many shoppers budgets.
The consumer price index for food and non-alcoholic beverages saw a slight dip of 0.1%, to 16.8% last month and energy prices are also expected to fall in the second half of 2023.
While Co-op Food managing director, Matt Hood said he thinks “there is incresingly positive news stories being put out there about energy prices starting to calm down,” he told Evening Standard that “inflation will probably still be with us on food unfortunately until the back end of the year.”
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Waitrose chief executive James Bailey told Times Radio: “There’s no question. It’s a very, very difficult market out there for consumers. The budgets are being squeezed very tightly… food inflation is part of that challenge.”
“Food and drink inflation remains worryingly high, although it’s encouraging to see signs that it’s starting to peak.
Food and Drink Federation chief executive, Karen Betts added: “Our industry can see the pressure that rising prices are putting on everyone’s weekly shop, and companies are trying their absolute best to limit price rises for shoppers.”
However, she said that with food and drink companies’ average production costs rising by 21% in 2022, “some price rises are having to be passed on in order for companies to remain afloat.”
“The pressure on our sector is such that all the evidence now points to double the number of food and drink companies going out of business in 2022 as was the case in 2019.”
Chancellor Jeremy Hunt said: “While any fall in inflation is welcome, the fight is far from over. High inflation strangles growth and causes pain for families and businesses — that’s why we must stick to the plan to halve inflation this year, reduce debt and grow the economy.”
Betts said the Chancellor can support the industry in next month’s Budget, “by incentivising companies to invest while trading is so tough, reforming the Apprenticeship Levy, and by ensuring new regulations on plastics and packaging both drive up recycling and drive down prices.”
