Sainsbury’s has begun cutting the cost of some everyday essentials in a sign that falls in global wholesale food prices in recent months are starting to be reflected in shops.
The supermarket is this week reducing the price of its own-label salted butter (250g) from £1.99 to £1.89, whilst the price of some of its bread lines is being cut from 85p to 75p.
While overall food inflation has continued to accelerate during 2023, Sainsbury’s stated that it was able to lower some of its bread and butter prices due to wholesale prices beginning to ease. This followed a surge in the cost of key commodities last year, driven by the war in Ukraine and supply chain problems linked to the pandemic and Brexit.
“Whenever we are paying less for the products we buy from our suppliers, we will pass those savings on to customers,” said Rhian Bartlett, Sainsbury’s Food Commercial Director.
Some of the earliest falls have been in milk, with most of the major supermarkets cutting prices last month after a reduction in farmgate prices.
In April, industry body the British Retail Consortium (BRC) said there was a three to nine-month lag to see wholesale price falls reflected in shops, and promised prices would come down over the next few months.
Retailers and manufacturers have faced claims that they are profiteering during the inflation crisis, although this has been denied, with some taking a hit to profits as they absorb higher costs.
Official data showed food prices in the UK were 19.1% higher in March than a year earlier, the biggest rise since August 1977. Meanwhile, more recent data from Kantar showed grocery inflation hit 17.3% in the four weeks to 16 April, down marginally on the 17.5% figure recorded in the previous month.
NAM Implications:
- An opportunity to take a breath and take the essentials initiative on bread and butter.
- A pointer for others…
- Watch this space…
