Steep rises in the cost of canned soup, beans, pasta and cooking oils sent the rate of inflation skyrocketing in June, latest data reveals.
IRI figures for the four weeks to 2 July 2022 show the highest leap in prices across UK retailers (not including the discounters) since the start of this year, with a 1% increase in that window driving the total price increase for the year to 7.7% for food and 9.6% in drinks (not including alcohol).
Canned soup, beans, pasta and cooking oils were the categories that saw the highest increases.
June was the month that Tesco went to war over prices with Heinz. Although, as a result of the dispute, there have been no rises in the price of some key Heinz SKUs in Tesco for now, the price of Heinz goods rose steeply in other retailers over the course of June.
Meanwhile, cooking oils have been severely impacted by ongoing availability and supply issues spurred by the conflict in Ukraine, also leading to price rises.
”We’re now seeing the retailers that previously didn’t pass on price rises to customers in full put their prices up, plus the manufacturers that originally delayed input price rises for retailers are now having to do the same,” said IRI strategic insight director Daniel Wright.
“For some manufacturers, they’re now on their second or third price increase conversation since Christmas. These are extraordinary times.
“The index gap in the producer price index is the widest it’s been for over a decade at 20.5 points,” he added. “This ultimately means that the cost to produce products is increasing faster than the factory gate price, which is in no way sustainable.”
IRI’s analysis also shows a major decline for sales of supermarket value ranges, of 11.2%. This suggested “a move to discount retailers among shoppers, as well as the removal of items from baskets to manage tighter budgets”, said IRI.
Indeed, decisions to buy cheaper products had helped mitigate price increases by 4.3%. unit sales of premium products, however, rose 2.2%.
It comes as The Grocer revealed today (25 July) a round of further price increases for olive oil in the supermarkets, with Filippo Berio UK boss Walter Zanre warning high temperatures and drought conditions in producing regions had “already impacted volumes for the next crop”.
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