Budgens shopper aisle

A pot of soured cream was one of the big risers in the Grocer 33 basket this week, and new research from The Grocer confirms Brits are facing surging prices across supermarket dairy aisles as supply shortages bite.

Supermarket prices for dairy products have climbed steadily this year and are now up 5% on average across 2,632 comparable SKUs, reflecting an increase in wholesale prices for key dairy commodities like butter, cream and cheese these past 12 months [Brand View 52 w/e 16 October 2017].

Cream has been hit particularly hard. Not only is a 300ml pot of soured cream a more expensive addition to shoppers’ baskets (see p21), but a 300ml pot of own label crème fraîche is up 21.9% compared with last year at £1.08 on average, while a 300ml pot of own label double cream is up 20.7% to £1.05.

On average, supermarket prices for cream are up 10% year on year across 125 branded and own label SKUs in the mults.

Prices for butters and spreads have meanwhile surged by 11% on average across 203 SKUs in the mults, with block butter in particular significantly more expensive than last year. A 250g block of unsalted own label butter is up by a whopping 49.9% at an average of £1.46, while a block of organic salted butter is up 11% to £1.11 on average.

Cheese hasn’t suffered the same dramatic uplift, but prices are still up 3% across 1,172 SKUs, with Continental (up 3%), snacking (3%), territorial (5%) and even cheddar (4%) cheese all increasing year-on-year.

A 400g block of own label British mature white cheddar is now 21.9% more expensive at £2.37, while a 250g pack of own label mature cheddar slices is up 4.8% to £1.92 on average.

Yoghurts are also more expensive than last year, up by 4% on average across 732 SKUs. A pot of 500g budget natural yoghurt is now 10.8% more expensive at 51p on average, while a 500g pot of own label healthy natural yoghurt is up 9.2% to 95p on average.

So far, the major supermarkets are holding steady on prices for fresh milk, with most still selling four pints for £1, two pints for 75p and a pint for 45p.

Wholesale prices for dairy commodities have been surging in the wake of a big drop in milk production across the EU, particularly in France, Germany, and the UK.

According to AHDB data, the UK ‘all milk’ average price was up 36% year on year in August at 29.56ppl, while UK milk deliveries stood at 6.2 million litres in the same month, down from 6.5 million litres in August 2015.

Milk fats are in particularly short supply, with rising consumer preference for butter over margarine compounding a shortage that prompted Arla boss Peder Tuborgh to warn the UK could face a butter and cream shortage this Christmas.

Month on month bulk cream prices were up 94% year on year in August, while unsalted butter prices were up 89% up year on year [AHDB].