Food prices taking a bigger bite out of household budgets

British grocery inflation hit a record 16.7% in the four weeks to 22 January 2023, according to market researcher Kantar.

Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “The continued rise in food prices is a major pain point for many Britons struggling to digest ballooning prices in other areas of expenditure – energy bills in particular. There has been nowhere to hide for households as inflation has been most acute in unavoidable household costs like food, energy, housing and transportation.

“Part of what’s fuelling food inflation are jumps in everyday larder products, such as milk and eggs. Food inflation is sticky because consumers are resigned to paying it as they form part of essential expenditure for many.

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“Those on the breadline continue to struggle most with rising food prices as they spend a greater proportion of their incomes on food than those further up the income spectrum. With many of us opting against receiving receipts at self-checkouts, it is difficult to keep track of price rises – supermarkets aren’t likely to shout about upping prices. It is also hard to notice price increases and budget for them when they go up in small increments over a stretch of time rather than a sudden jump.

“Making use of supermarket loyalty cards and schemes can go a long way in offsetting price increases. Most loyalty initiatives offer worthwhile savings ranging from exclusive discounts to members to freebies by earning points. Every little helps amid the biggest fall in living standards in generations.”