After months of price deflation in the food and drink sector, inflation crept back in April. Prices on our new basket of 1,000 items rose 0.8% for the four weeks to 27 April, compared with a 0.7% fall in March and 0.6% fall in February. Overall prices rose at three of the big four in April, with only Asda, which announced its new Price Guarantee this week, lowering its prices.
Our list of products, which covers all major grocery categories, was 2.5% cheaper at Asda this month, but 1.3% more expensive at Tesco, 1.1% more at Sainsbury's and 2.9% more at Morrisons.
The price increases were largely driven by the alcohol and fresh produce categories. Booze prices across the big four were up 2.8% with fruit and veg up 2.6%. Drinks suppliers said prices had been increased in the past few months in order to fund deals for the World Cup.
With the tournament kicking off next month, most suppliers are predicting this will be the last inflation in the category for some time. Indeed, there is already some deep discounting on beers. As The Grocer went to press Asda was offering a range of major lager brands in 20 and 24-packs for as little as £9, and Tesco was running £10 deals.
"The price increase is down to the knock-on impact of the duty increases of five weeks ago," said the sales director of a major lager brand. "But with the World Cup approaching and promotions set to be more prevalent, average prices should dip in the coming weeks."
Price rises in the fruit and veg aisle were largely due to inconsistency in supply during the transition from international growing seasons to domestic ones.
Celery experienced the largest hike in prices, up 15.4% on last month. One supplier explained that cold and wet weather in Spain since the turn of the year had devastated much of the crop, leading to higher prices this year. Prices are likely to remain high until June when the British harvest begins.
The price of salad has also been rising, with rocket up 6.4% and romaine 4%. Spring onions were 1.5% higher than in March, with much of the increase due to rising labour costs rather than seasonal factors.
Not everything was rising in price. Bakery, frozen, health & beauty, dairy and deli products were all down.