Supermarkets raise ‘value’ food prices faster than inflation

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Mazic News has tracked the prices of hundreds of staple brands in major supermarkets – and found that shoppers were facing sharp price hikes.



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Upmarket groceries have seen steep price increases since April

According to Mazic News, UK supermarkets increased prices for their basic range of food and drink faster than headline inflation in the three months to June.

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Exclusive research found that prices for inexpensive groceries and soft drinks rose an average of 3.6% between April and June in five major supermarkets.

Figures from the Office for National Statistics (ONS) show that the inflation rate – as measured by the Consumer Price Index (CPI) – for the same goods was just 2.7% during the period.

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Our numbers show that for more than a third of items, price increases outpaced inflation, with prices rising about 30 times faster than inflation in some cases.

At Sainsbury’s alone, prices rose an average of 4.9% – around 1.8 times faster than inflation.

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The analysis follows ongoing criticism from activists like food writer Jack Monroe of the official cost-of-living measure’s ability to accurately reflect price increases faced by the poorest households.

Experts from the charity Food Foundation and the Institute for Public Policy Research’s Center for Economic Justice are now warning of “dramatic” cuts in living standards and “severe hardship” in the coming winter if steps aren’t taken to bring down the rising cost of living.

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How have the prices for value range items changed?

Mazic News has been providing price snapshots of hundreds of core grocery items at Aldi, Asda, Morrisons, Sainsbury’s and Tesco every month since April.

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Items covered include basic own-brand products such as Asda Smart Price, Morrisons Savers and Aldi Everyday Essentials, as well as a collection of in-house tertiary brands that have replaced the Tesco Value and Sainsbury’s Basics lines in recent years.

The latest ONS CPI inflation data is for June and shows that food prices have risen by an average of 3%, while soft drink prices have risen by 1% – giving a combined inflation rate of 2.7%.

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Between April and June, we were able to collect price data for 587 inexpensive groceries and 30 soft drinks on supermarket websites.

Accordingly, food prices rose by an average of 3.5%, or by 3.6% for food and beverages together.

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Four out of five supermarkets had a higher inflation rate for groceries alone, only Aldi came below the 3% rate with an increase of 2.8%.

For food and drink combined, all five supermarkets had a higher rate of inflation compared to the CPI – although Aldi’s rate of increase was still 2.8%, just above the CPI rate of 2.7%.

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We also assigned 620 of the products to a specific commodity category within the ONS detailed CPI breakdown (17 products were either not included in the UK CPI or could not be easily assigned to a category and were therefore excluded from this part of our analysis).

This showed that a third of the products (203) experienced faster price increases compared to the inflation rate of similar types of goods.

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Sainsbury’s House 247 detergent showed the biggest difference. The price doubled from 75p to £1.50, despite -1.8% deflation across cleaning products as a whole.

At Sainsbury’s, Hearty Food Co’s frozen potato croquettes are up 48% from 61p to 90p. But inflation for potatoes – which belongs to the category of frozen potato products – was 5.6%. The croquettes would have cost 64p if they had risen with inflation.

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Which supermarkets had the biggest price increases?

According to our analysis, price increases at Sainsbury’s have been the highest relative to inflation.

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Over the three-month period, food/non-alcoholic beverage prices increased by 4.9% compared to the CPI of 2.7%, while food prices alone increased by 5.1% compared to average inflation of 3%.

Tesco saw the next highest average price increase – 3.6% for food and drink combined or 3.7% for food alone.

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In terms of the proportion of products that saw anti-inflationary price increases, Asda was the worst performer with 41% of products affected.

What do the experts say?

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Isabel Hughes, manager of political engagement at the Food Foundation, said rising prices are taking a toll on household budgets.

“The cost of living crisis doesn’t just mean that low-income households are buying fewer luxury items,” she said.

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“More and more households cannot even afford the basic necessities – groceries, let alone shampoo or washing powder.

“People are already facing great hardship and as winter approaches we face an imminent crisis that requires urgent attention and action.”

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Shreya Nanda, an economist at the Institute for Public Policy Research’s Center for Economic Justice, said the cost of essentials has risen dramatically in recent months and is expected to rise further.

“Without further policy action, we can expect a dramatic drop in living standards for a large part of the population,” she said.

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“Increased support and measures to increase energy production in the medium term are urgently needed to avoid this and end this crisis.”

‘Laser focus’ on the price of the weekly shop

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Mazic News reached out to Morrisons, Sainsbury’s and Tesco — where grocery inflation has been highest — for comment.

Tesco said it is “absolutely committed” to helping its customers and is keeping an eye on the cost of weekly shopping.

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“We’ve significantly increased the number of Value Lines we offer, and whether it’s pricing basics to match Aldi prices, promising low everyday prices for household items, or offering exclusive deals and rewards through thousands of Clubcard prices, we’re committed more than ever to offer our customers great added value,” said a spokesman.

A Morrisons spokesman said: “We are working hard to support customers during this difficult time and in our entry-level range we are currently rebranding our fresh products to the Savers brand to make them easier for our customers to identify and shop for.”

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A spokesman for Sainsbury’s said: “With costs rising, we are working hard to keep prices down.

“We invest over half a billion pounds to ensure the items people buy most are on shelves at the best prices and we are confident that our Sainsbury’s quality, Aldi Price Match campaign and the price lock promise make a big difference for our customers.

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“Our latest financial results show that we are raising prices more slowly than our competitors and are focused on providing our customers with the best quality, value for money groceries.

“In stores and online, shoppers can now find new, low prices on everyday essentials – from chicken breasts to ground beef, butter, onions and strawberries.

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“The bold steps we’re taking to focus on value means all of our customers can find great deals when they shop with us and don’t have to go anywhere else to get the best prices on their weekly purchase. “

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