Following the soaring British energy bills, prices of goods rose 1.7% in the four weeks to Oct. 3 year-on-year. The increase in grocery prices is adding to pressure on households, market researcher Kantar said on Tuesday.
On Saturday, a Bank of England policymaker told households to get ready for early interest rate rises.
Meanwhile, a survey published on Monday showed consumer confidence has dropped to a five-month low.
Fraser McKevitt, head of retail and consumer insight at Kantar, said, in real-world terms, the average household had to spend an extra 5.94 pounds ($8.08) on groceries last month than they did at the same time last year. Kantar said prices are rising fastest in markets, such as savoury snacks, cat food, and crisps while falling in fresh bacon and vegetables.
The typical household spends 4,726 pounds per year in the supermarkets, McKevitt said. So any future price rises will quickly add up, he added.
Kantar first reported grocery prices starting to rise again in August, rising 1.3% in its September report. However, Britain’s biggest supermarket group, Tesco (OTC: TSCDY), said last week that its prices were still falling.
According to Kantar, UK grocery sales fell 1.2% year-on-year in the 12 weeks to Oct. 3. However, they were 8.1% higher than pre-pandemic times compared with the same period in 2019.
Christmas shopping is around the corner, with sales of Christmas puddings up 76% year-on-year in the last four weeks. Moreover, sales of toys were up 5% and sales of gift wrapping products up 10%.
McKevitt said it’s important to say, however, that these are still relatively small numbers. And anxiety around supply issues has not translated to panic buying, festive or otherwise, he added.
Last month though, panic-buying of fuel was seen, and a shortage of tanker drivers disrupted supplies. This resulted in people limiting the number of trips they made to supermarkets.
Crisis in Britain
Meanwhile, the British steel industry’s lobby group warned of an impending crisis amid soaring wholesale energy prices on Monday. That could force plants to shut and stoke emissions. Moreover, it could cause chaos through supply chains.
A shortage of natural gas in Europe caused a rise in electricity and gas prices. It caused a rise in prices paid by people trying to heat their homes and prices paid for major heavy industrial plants smelting steel.