Latest research from Which? confirms that the cost of some branded food and drink products has more than doubled in the last 12 months, with the consumer watchdog again calling on leading supermarkets to help struggling shoppers by stocking their budget alternatives in smaller stores.
Last month, Which? analysed the prices of almost 26,000 food and drink products for its inflation tracker at eight major supermarkets – Aldi, Asda, Lidl, Morrisons, Ocado, Sainsbury’s, Tesco and Waitrose – to see how individual product prices are being affected.
July’s research focused on branded products, which despite having a lower rate of inflation year-on-year (12.2%) than standard supermarket own-label ranges (14.6%) and budget products (24.3%), tend to cost more overall.
To guide supermarkets in taking the step of stocking more budget lines in their convenience stores, Which? is launching a set of key tests. These aim to ensure that major supermarkets – especially those with the most convenience stores such as Tesco and Sainsbury’s – not only stock budget ranges but that these items are wide-ranging to include healthy products, are affordable, and are consistently available.
Which?’s latest inflation tracker shows that branded snack foods saw the largest increases overall last month. The branded product with the single largest price increase year-on-year was Mr Kipling Chocolate Slices 6 pack at Tesco, which went from £1.16 on average in 2022 to £2.66 in July 2023 – an increase of £1.50 or 129%. Similarly, Mr Kipling Bakewell Cake Slices x6 at Sainsbury’s went from £1.38 to £2.75 – an increase of £1.37 or 99%.
At Asda, it was a branded yoghurt that saw the highest year-on-year inflation, with Lancashire Farm Natural Yogurt 1kg and Lancashire Farm Fat Free Natural Yogurt 1kg going from £1 to £1.80 – a hike of 80%.
Meanwhile, at Morrisons, Pilgrims Choice Extra Mature Grated Cheddar 180g and Pilgrims Choice Sliced Extra Mature Cheddar 150g both went from £1.20 to £2.11 – an increase of 76%.
Which?’s tracker found that year-on-year supermarket food inflation has dipped again, from 15.4% in June to 13.8% in July. However, when it looked at the rate of inflation over two years, it was 25.6% in the three months to the end of July 2023 compared with the same period in 2021 – more closely reflecting changing prices since cost of living pressures emerged.
Which? noted that there were notable falls in inflation for products like milk and butter that have been subject to well-publicised price cuts in recent months. The rate of inflation for butter and spreads in July was 6.3% compared to 10.9% in June and 14.1% for milk in July compared to 19% in June.
However, in both cases, the watchdog noted that prices are still significantly higher compared to what shoppers were paying before the cost of living crisis, showing the challenge many shoppers are still facing to afford everyday essentials.
Which? highlighted the importance of budget ranges to help people save money in tough economic times. Its previous research found that two-thirds (67%) of consumers feel that supermarkets are ripping people off with convenience store prices, and nearly half (45%) of people struggle to find affordable food in convenience stores. Over half (57%) of people agreed that more budget ranges in convenience stores would help them.
In July, the Competition and Markets Authority (CMA) also highlighted that consumers relying on convenience stores could not adequately benefit from competition to the full extent of those with access to large supermarket stores.
In recent months, Which? has been calling on the likes of Tesco, Sainsbury’s, Asda and Morrisons to stock essential budget range items in their smaller stores. Its key tests criteria calls on retailers to prioritise areas with those most in need and urges supermarkets to stock their convenience stores with a wide range of budget items, including healthy foods.
Morrisons has already begun to roll out some budget lines in its convenience stores, while Tesco announced this week that over 50 everyday products in its Express stores will be replaced with cheaper alternatives, many of them own-label, with some items less than a third of the price of the products they replace.
Which? acknowledged that these moves were a step in the right direction but noted that the product examples given are not the cheapest option the retailer stocks. It wants all supermarkets’ convenience stores to provide products from their budget ranges as these are generally cheaper than standard supermarket own-label lines.
“The scale of price hikes to some branded products at the supermarket over the last 12 months is barely believable and highlights the huge pressure faced by shoppers, especially families and those on low incomes,” said Sue Davies, Which? Head of Food Policy.
“With food prices expected to remain high for the rest of the year, Which? is calling on supermarkets to ensure expensive convenience stores are stocked with a range of budget items that support a healthy diet – and setting key tests that they can work towards to show they are willing to make a meaningful difference for their customers most in need.”
NAM Implications:
- So much for 7.5% inflation…
- Think of the damage being done to branded and retail reputations by consumer perception of price-hikes…
- …now compounded by this Which? Research.
- (and add a little shrinkflation for good measurement…)
- Time for a really fundamental review of ’What business are we in?’ by all stakeholders.
- In readiness for a slow, really slow ‘recovery’?
