One of the most significant areas impacted by inflation is with food prices within the local store and supermarket. Reasons for the increases given by food providers and retailers include spiralling energy costs and supply chain shortages. However, these reasons do not stand-up all that well when a price differential is introduced.
New data compiled by a price intelligence company has revealed that even the cheapest food items are rising at the fastest rate across the major U.K. supermarkets. In contrast, items over £5 have dropped in price. This means that the impact of inflation is disproportionately affecting those on the lowest-incomes, revealing a social class dimension to the current economic situation.
Hence, the trend indicates that supermarkets are increasing the price of their value items more quickly than more expensive items. The analysis comes from the firm Skuuudle.
Skuuudle tracked the cost of almost 19,000 items in U.K. supermarkets on a daily basis from July to December 2022. The number crunching showed that items originally below 75 pence accelerated at the fastest rate.
These items include many supermarket value range products including biscuits, chocolate, snacks, oils, rice, pasta, cans and packets of food. Food staples selling for under the 75 pence cut-off have risen by 16 percent. In addition, items priced up to £1.50 increased by eight percent.
At the same time, items selling for over five pounds have generally decreased in price up to nearly four percent according to the data. It follows that the number of poor households that lose out from price increases is typically larger than the number that benefit.
The figures relating to the 18,790 supermarket food products show a direct correlation between original cost and rate of increase with cheaper items increasing in price at a higher rate than more expensive alternatives.
A Skuuudle spokesman tells Digital Journal that retailers have an unenviable ‘balancing act’ to perform when it comes to pricing, having to consider the needs of the customer, their suppliers and the supply chain.
The statement continues: “The changes make difficult reading for those on low incomes who are seeing the cost of many value items increase but who may not be able to benefit at all from the reduction in price of more expensive items. This change could well be driven by a reduced demand for more expensive items as more people turn to value products during the cost of living crisis.
What is interesting from the data sets is how supermarkets are choosing to pass increased costs onto consumers, and the tactics are more focused on passing on the largest increases onto the poorest sections of society.
