The price of groceries in the UK has risen by 5.9 per cent in the past year, exacerbating a wider cost of living crisis for households reeling from soaring energy bills — and increasing the political pressure on Boris Johnson.
Market researcher Kantar said on Tuesday that the rise in prices was equivalent to £271 a year for the average household, the biggest increase since December 2011.
The group said customers were increasingly turning towards discounters such as Aldi and Lidl to try to make their budgets go further. “We are seeing a clear flight to value as shoppers watch their pennies,” said Fraser McKevitt, head of retail at Kantar.
Johnson’s position as prime minister is already vulnerable because of the partygate scandal, which has seen him fined for attending an illegal party in Downing Street during a Covid-19 lockdown.
But the cost of living crisis poses a potentially more serious challenge to his administration in the coming months, with no end in sight to the pressure on household finances.
The price cap on most consumers’ energy bills rose by 54 per cent to nearly £2,000 in April and is expected to rise again in the autumn because Russia’s invasion of Ukraine has pushed wholesale gas prices even higher.
Although Rishi Sunak, chancellor, has announced a £9bn package to help households with this month’s price rise, a large part of this involves loans rather than grants. Sunak has indicated that he may need to give further help in the summer, depending on market movements in the coming weeks.
Johnson on Tuesday chaired a cabinet meeting in which ministers were ordered to come up with “innovative ways to ease pressure on household finances” without running up new costs to the Treasury.
The ideas will be discussed at a meeting of the government’s “domestic and economic strategy committee” in a few weeks’ time, the government said.
Among the measures will be a commitment to crack down on “unacceptable behaviour” by companies that are considered to be unfairly pushing up bills for households. “Private companies must play their part,” Number 10 said.
Downing Street refused to give any examples of concrete measures discussed at Tuesday morning’s cabinet meeting. However, officials have confirmed a report in The Sun that ministers have proposed cutting tariffs on imports of food products and refined oil products.
Sunak insisted at the meeting that the new measures could not fuel inflation and therefore had to be funded from existing departmental budgets.
Meanwhile, Lisa Nandy, shadow levelling-up secretary, has told Labour leader Sir Keir Starmer at a meeting of the shadow cabinet that he should shift his political attacks more towards the cost of living and away from partygate.
One party aide said: “That seems a bit unfair given that we’ve been banging on about rising prices for months on end.”
Louise Haigh, shadow transport secretary, said: “It is possible for people to hold two thoughts in their head; the cost of living and anger about a lawbreaking prime minister.”
Overall inflation in Britain hit 7 per cent in March, a 30-year high, and is expected to reach 9 per cent later this year.
Kantar said grocery sales had fallen 5.9 per cent by value in the 12 weeks to April 17 as people tightened their belts to deal with rising prices.
Aldi has increased sales by 4.2 per cent year on year, with rival Lidl up 4 per cent.
With shoppers turning towards discount chains, purchases fell at some of the main supermarket chains. Sales at Sainsbury’s, Asda and Morrisons were down 7.7 per cent, 10.3 per cent and 10.5 per cent respectively.
Source: Economy - ft.com
