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UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

grocerygazette.co.uk

191–200 of 1001 posts

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#191
post #4

A lot of the inflation on food is increasingly feeling like businesses cashing in. For instance my old go to brand of breed increased by over 50% months ago.

Did their costs go up too?

Energy price in EU is at pre-war levels, as far as I know, for some months now. It definitely must be something else. I live in a country where everybody eats bread every day, and the price increase has been around ~80% over the span of a year. The price of flour has risen by around ~15-20% with all the "Ukraine is a major grain exporter" uncertainty since the beginning of the war. Corporate profits are unprecedented, so it cannot be anything else but pure greed.

Never let a crisis go to waste.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#192
post #167

As a person living in the UK, I have definitely noticed a considerable rise in unit prices. One of many examples is that a loaf of my favourite bread increased from £3 to £4 recently, which was a shocker. Toilet roll prices, as ever what the news loves to talk about, has exploded, increasing by around 70% since 2020 by my anecdotal observation. A sad thought I have about inflation is the fact that it is, wittingly or…

Assets are deflating at the moment though. S&P500 is down, property prices are down, etc. Asset prices are highly inversely correlated to interest rates, so for a 'rich' person you are actually much better off without inflation, as interest rates are lower and asset prices rise faster.

[deleted]

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#193
post #47

Meanwhile in Sweden the CEO of ICA, the largest supermarket chain in the country (53% of the market) said yesterday: "It is actually the consumer who controls what they are prepared to pay for a product. In the end, it is they who decide." https://omni.se/icas-vd-det-ar-kunderna-som-avgor-matpriset/...

In an ironic way, the consumers decided to leave the EU and expose the UK to higher inflation. Though much of the world has been seeing severe inflation at this time, it would have probably been better if the UK had access to a broader food market.

The UK still has access to those markets. The problem is not that we can't import goods, but that there are fewer goods to import and they are being sold at higher prices.

For example, in January, food inflation in France was 14.8% and in the UK it was slightly lower at 13.3% and the OECD rate was 15.2%. It's not a Brexit problem; it's a production problem.

- https://tradingeconomics.com/france/food-inflation

- https://www.theguardian.com/business/2023/jan/04/record-133-...

-https://www.ons.gov.uk/economy/inflationandpriceindices/arti...

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#194
post #167

As a person living in the UK, I have definitely noticed a considerable rise in unit prices. One of many examples is that a loaf of my favourite bread increased from £3 to £4 recently, which was a shocker. Toilet roll prices, as ever what the news loves to talk about, has exploded, increasing by around 70% since 2020 by my anecdotal observation. A sad thought I have about inflation is the fact that it is, wittingly or…

> In an inflationary economy, the winners are rich who have valuable assets whose value skyrocket - think real estate, businesses, etc.

On the other hand, rising interest rates causes all assets to decline in value, and the decline is worse depending on how far away the "maturity date" is. It looks like the UK has been raising rates, similar to the US. [1]

[1] https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.a...

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#195
post #80
post #35

Demand for food is inelastic, so it makes sense that companies are raising prices as high as possible since people still have to eat. Generally this leads to price competition from other food brands, but when single companies own dozens/hundreds of food brands it’s easy to act like a cartel and keep prices high.

I'm not sure how this cartel like behaviour works in the UK where every major supermarket has its own range of competing products - and then there is the likes of Aldi that is 90% stocked with brand lookalike knock offs? There are currently competing narratives in the UK about food prices - greedy supermarkets v poor farmers and the same people complaining then say they shop at Aldi because it's cheaper. Food is stil…

> Food is still cheap - it represents a small percentage of people's income.

If you look at it as an average for the population, sure. But that masks the real issue, which is that it hits poor people the hardest because spending on food doesn't scale proportionally with income.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#196
post #138
post #116

Earlier quoted context omitted.

It's both increased wholesale food costs and price gouging. Profits have never been higher all along the board. Everyone in the chain is "passing the cost on" and also taking a little extra cut.

gouging is an incredibly unhelpful context in a macroeconomic sense. In cases of shorter term scarcity (e.g. toilet paper during early covid), you can have instances of gouging. But over a longer-term period where prices are calibrating to demand/supply dynamics, price increases simply reflect the shifting balance between supply and demand. Should we be concerned about why there are shifts in demand/supply? Sure.(In…

In the US, M2 increased 70% in 2 years. Of course prices are going up. Anything less than a 70% increase means companies have a ways to go to catch up.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#198

For reference, that's a fairly average value for Europe at the moment. Not sure why the UK is being singled out. https://i.redd.it/8hbhiqhowjpa1.png

In general there seems to be a weird zeitgeist of negative exceptionalism in the UK at the moment.

Not sure why but generally journos seem to write about issues like they are only hitting the UK when a simple google search shows they aren’t.

It does come across like a weird concerted effort to paint the UK as collapsing since leaving the EU. The majority of journos seem to be able to write only negatively about UK current affairs unless you read something like The Express who are delusional in their own right.

Most recent ones I can think of are the failed space launch and British volt going under.

These were both highly ambitious projects that had a high chance of failure, especially the space launch. It’s unlikely you’re going to get your first launch right, famously it takes many attempts.

When both of these happened journalists seemed to revel in the failure. It was very odd to see.

I understand with these two examples a lot of it has to do with government/brexiteer chest thumping which shon a spotlight on them. However it was still odd to see.

I think this then trickles down to places like HN (who’s membership generally has a bias towards remain) who also see an opportunity to revel in it.

This is odd as well because I can see why Britons or Europeans would be passionate about membership in a regional trade bloc, Americans who get really passionate about it confuse me. As a Briton I didn’t really care when America left NAFTA.

This is assuming the majority of people on HN are American but based on time zones and when articles are posted I’m probably wrong.

Edit:

This is a UK based publication writing about Groceries in the UK which is why it’s so specific. Your comment just spurred something I’ve been thinking recently.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#199
post #92
post #35

Demand for food is inelastic, so it makes sense that companies are raising prices as high as possible since people still have to eat. Generally this leads to price competition from other food brands, but when single companies own dozens/hundreds of food brands it’s easy to act like a cartel and keep prices high.

If wholesale food costs have gone up and they're simply passing that on then they may not be making any more money. Here's wholesale food prices in the US: https://fred.stlouisfed.org/series/WPU578101 In fact you'd expect reduced sales from the higher prices to put pressure on profits. That is what seems to be happening in the UK: https://www.grocerygazette.co.uk/2023/01/31/food-companies-p... But not in the US, wher…

Fertilizer prices have been historically high, which impacts the underlying costs of most things you buy at the supermarket: https://fredblog.stlouisfed.org/2022/10/fertilizer-prices-so...

The root cause is economic decoupling between Russia, China, and the U.S.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#200

Earlier quoted context omitted.

Jokes on them. I just eat less food now to compensate. That will show them.

And to put cherry on top, you will become leaner and healthier. Now THAT will really make them think twice!

Assuming that izzydata ate a poor diet before. They might just become malnourished instead.
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