Inflation on the menu this Christmas

Festive dinners up 19% for vegetarians and 11% for a turkey meal since last year.

The cost of Christmas dinner has gone up by 19% for vegetarians and 11% for a turkey meal compared to last year due to a surge in food prices and rampant inflation, new analysis from interactive investor, the UK second-largest investment platform for private investors, finds.

Our Christmas dinner inflation shopping basket comprises of typical Christmas dinner ingredients based on the Christmas shopping habits of the ii team. It includes a few guilty pleasures and Christmas luxury items to feed a family of four.

The Christmas turkey crown is organic – a treat for Christmas. But while we’ve gone for some ‘Tesco finest’ and other Christmas treats such as goose fat, we’ve also mixed it up with some basics. We believe it is not unusual for shoppers to mix and match from different ranges, depending on their tastes/priorities and budgets.

• Read about: Free regular investing | Opening a Stocks & Shares ISA | Cashback Offers

Comparing the prices of the goods in our inflation shopping basket from the festive period in 2021, interactive investor’s analysis found the price of organic turkey rose by 5.3% or £2.25 to £45, while the nut roast option for vegetarians and vegans has gone up by 27.3% or £3 to £14 for two nut roasts (enough to feed a family).

The prices of Christmas dinner trimmings have seen the largest percentage increases – albeit from lower price points. Parsnips and sprouts prices have risen by 226% and 150%, respectively, from the previous year. Maris piper potatoes are up 30%, the cost of goose fat they are often cooked in is up 43% and organic carrots are up 15%.

However, not every component of Christmas dinner is more expensive. The cost of our example Christmas pudding has remained unchanged, but the same double cream in the Christmas shopping basket in 2021 has gained 12.5% in price. The gluten-free ‘free from’ chocolate sponge option has risen by 4.2%.

After-dinner nibbles have also risen, with a pack of four mince pies up 28% and After Eight mints up 67%. The cost of cheese has increased too: Tesco’s ‘finest’ Brie is up 18% and its ‘finest’ Gruyere is up 17% from the previous year.

When it comes to drinks, the cost of Tesco’s finest Merlot remained flat, but the non-alcoholic option, Shloer, rose by 9.1%.

More broadly, recent data by data analytics firm Kantar revealed that supermarket inflation in the UK hit a record 14.7% in October, driving up the average bill by £682 per year.

Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “At many Christmas gatherings this year, inflation will be on the menu.  

“High energy costs, labour shortages and even challenging weather conditions have combined to push up the cost of Christmas dinner, with the trimmings seeing the biggest percentage increases. Even the pack of four mince pies has gone up by 28% over the space of a year. But in pounds and pence terms, the proteins are still the most expensive part of the meal.

“The veggie nut roast option in our inflation basket is 27% or £3 more expensive than it was last year. In comparison, despite pressures from rising energy prices and the increase cost of turkey feed as a result of the Ukraine war and the avian flu outbreak, the cost of our organic turkey pick has risen by 5.3% or £2.25. This could suggest that some supermarkets may choose to absorb the heightened cost burden to attract custom at a time when many people are tightening their belt amid the cost-of-living storm. Some stores, such as Iceland, haven’t raised prices on several of the equivalent goods from our shopping basket.”

“The rising cost of Christmas dinner is difficult to digest at a time when we are paying more in seemingly all areas of expenditure from household energy to spend at the nation’s forecourts to fuel our cars. Low-income households spend a greater portion of their incomes on food, so the price rises are set to hit them particularly hard.

“Not everyone tracks their receipts in as much depth as we did, but hopefully this serves as a good reminder that we all have our own, relative, inflation number. As such, when evaluating your spending habits, you must look at what makes sense for you.

“Many people won’t want to scrimp on the big festive meal, but it is important to live within your means to avoid a post-Christmas debt hangover. Some families will eat what they want at Christmas and make adjustments elsewhere in their budgets, while others might try to cut their food bill by shopping at discount supermarkets or switching to less expensive store-brand alternatives.”

Alice Guy, Personal Finance Expert, interactive investor, says: “Christmas is coming and while the goose is getting fat, our wallets and bank balances are looking decidedly thin. With spiralling food costs and bills, many of us are looking for ways to save money this Christmas.

“The cost of a Christmas meat feast has increased by 11% compared with last year, while vegetarians are facing even steeper inflation, with the cost of their Christmas basket rising a staggering 19%.

“Christmas turkey makes up more than half the cost of a Christmas shop for meat eaters, and the fact that turkey inflation is relatively low is keeping the overall inflation down for their basket. The cost of a Christmas turkey has only risen by 5%, whereas the cost of pigs in blankets and mince pies have spiralled by 23% and 28%.

“In contrast, the vegetarian basket has gone up 19% because the cost of a nut roast has risen 27%, compared to turkey prices only increasing 5%.

“Turkey is often sold as a loss leader at Christmas. Supermarkets know that many of us focus on the cost of the Christmas turkey when we’re planning our Christmas shop. If they keep the cost of our Christmas joint down, we will hopefully spend more on all those little treats and extras where they make a higher profit.

“My local butcher told me that the cost of turkey has gone up 25% to them, but they’re only passing on 5% to their customers. It’s a tough time for small butchers, who are hoping that once customers come through the door they’ll spend on higher margin products, such as sausages and ham.

“Supermarkets often promote the fancy stuff at Christmas because they know we’re more likely than normal to choose the extra special mince pies or the finest wine. But upgrading our food choices compounds the effects of inflation. Instead of buying the basic Brie for £1.90 we buy the premium option for £3.25, and all those little changes mount up.

“Resisting the temptation to trade up to more expensive items can be a great way to save money at Christmas. As a mum to two hungry teenagers, I can guarantee that they won’t really know the difference between standard cheddar and the premium stuff once it’s out of the packet, especially when they’re already full to bursting from their Christmas lunch. If you do have a family of cheese connoisseurs, then you might decide to splash out on the cheese but buy a cheaper wine.

“Another controversial option could be to trade out your Christmas turkey for a chicken or another meat. It’s arguably even more delicious, and there’s an added bonus that you won’t need to have turkey curry on Boxing Day!”

Source: interactive investor