Food prices set to climb through 2014

Published by Laura Whitcombe on 25 March 2014.
Last updated on 25 March 2014

Food

Supermarket and restaurant prices are set to rise through the course of the year as food inflation is outstripping general inflation.

Food price inflation is now 3.8%, according to research from Prestige Purchasing, while the Bank of England's official measure of inflation is running at 1.9%.

This will have the effect of putting up the price of food bills in shops and restaurants as food sellers will be forced to pass on increasing wholesale costs to customers.

Not even promotions and pledges to match prices will be enough to keep prices down on staples such as meat, bread, milk and cheese.

In fact, UK households could have to pay out an extra £850 a year on food until 2018, a period in which £19 billion could be added to UK grocery bills, according to retail experts Conlumino.

Between 2000 and 2013, there has been a 51% rise in food price inflation, it added. 

Shortage

"There is a world food shortage," said Neil Saunders, a retail analyst at Conlumino.

"There is a lot of demand particularly for dairy and meat coming from Russia and China but there's no quick fix when it comes to farming. Prime agricultural land found in Western markets is already yielding as much as current technology and farming methods allows. It could be another 10 years before scientific advances increase yields further. That means prices will rise."

He added that freak weather around the world has further hindered supply.

The cost of fruit has risen more than any other type of food, according to Prestige, up more than 10% year-on-year.

Vegetable and meat price are up by more than 5% and sugar, chocolate and sweets are up by 1%.

Drinks prices are soaring too, with wine prices rising by 16% year-on-year.

So how can you keep your grocery bills down?

  • Try low-cost supermarkets. 'Back to basics' shops like Aldi, Lidl and Iceland may not stock your favourites, but you'll save money by shopping there.
  • Be wary of buy-one-get-one-free promotions. 'Bulk buy' offers may seem a good idea, but many deals are only useful if you normally buy the product on offer in the first place and can store the extra items. In fact, smaller equivalents may work out cheaper, so always check the individual price first.
  • Write a shopping list. Avoid overspending by planning your meals and writing down what you need. Supermarkets thrive on customers not knowing exactly what they want and buying items they don't need.

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