Food and drink inflation is no longer possible to ignore – and it’s the price of booze that is most to blame, reports Ronan Hegarty

Despite the intense price competition between the leading supermarket chains, shopping bills were moving in only one direction this month upwards.

For months, food price inflation has been more notional than real. Not any longer.

Average prices across the big four grocers rose 2.1% in the four weeks to 25 January, reveals the latest Grocer Price Index (GPI) the only food price tracker that factors in promotions to give a true reflection of the rise or fall in the cost of a trolley of groceries.

The figures confirm that the traditional round of January price cuts has not been enough to mitigate the combined impact of the increase in VAT to 20%, soaring fuel prices and other rising costs although had it not been for these promotions, the price of a family shop would have risen even more sharply.

Alcohol has seen the biggest rise and played the most significant role in sending overall prices skywards. With the end of the pre-Christmas and New Year deals, average booze prices across the big four retailers have shot up 8%.

The price of frozen food has also climbed considerably by 6.1% on December. The figures were surprising, said British Frozen Food Federation director general Brian Young, as frozen prices had fallen over the previous quarter. He suggested suppliers were now trying to get price rises though to counter the spiralling cost of production, and added that the volume of promotions may have fallen in the post-Christmas period.

Looking at the retailers, prices have risen across the board. Asda's prices have increased 1.5% in the past four weeks compared with a 3.3% hike at Tesco. This will strengthen Asda's position as the UK's cheapest supermarket but whether it is 10% cheaper, as it claims, remains a matter for debate between rival retailers.

In fact, it is Sainsbury's that has been the most successful in keeping a lid on inflation in January with prices rising just 1.3%. Morrisons prices have risen by 2.2%, while those at Waitrose, which is not included in the Grocer Price Index, have increased by 2.3%.