Discounters Lidl and Aldi raised grocery prices the most at the end of last year, according to new research, which found that budget and own-brand items saw the biggest hikes across the industry.
Lidl’s prices went up the most in December, with a 21.1% increase compared to a year ago, followed not far behind by Aldi at 20.8%, according to research by consumer group Which?, which tallied with its previous grocery price research.
Next in line were Asda at 15.4%, Waitrose at 14.5%, J Sainsbury PLC (LSE:SBRY) at 13.7%, Tesco PLC (LSE:TSCO) at 13.1%, Wm Morrisons Supermarkets at 12.9% and Ocado Group PLC (LSE:OCDO) at 12.9%.
Overall, inflation among supermarkets was found to average 15% in December, while official inflation data from the Office for National Statistics today also revealed prices for food and non-alcoholic drinks in December were up 16.8% on a year ago.
The annual rate of inflation for this category has risen for 17 consecutive months now, while recent research also suggested that supermarkets were profiting while farmers and suppliers were getting less than a penny in the pound.
Across the industry, budget items were hiked by an average of 20.3%, with own-brand items raised 18.5%, compared to inflation for premium and branded goods of 12.6% and 12.5% respectively.
The biggest individual price hike was on Quaker Oat So Simple Simply Apple at Asda, which rocketed to £2.88 in December from an average of £1 at the end of 2021 – a surge of 188% - while the category with the biggest rises was butters and spreads, up 29.4%.
Which said many people had told researchers they were skipping meals in order to make ends meet and its consumer insight survey found dwindling trust in supermarkets that “shows that the sector could be doing a lot more to help households through the cost of living crisis”.
Sue Davies, head of food policy, said: “Some households are already skipping meals to make ends meet and our findings show trust in supermarkets taking a hit as many people worry they are putting profits before the people suffering during this cost of living crisis.
“Supermarkets must do more, Which? is calling for them to ensure everyone has easy access to basic, affordable food ranges at a store near them, particularly in areas where people are most in need, as well as pricing which enables people to easily work out best value and promotions to support people who are particularly struggling.”
Speaking about the ONS food and drink inflation, Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, noted that the official data showed “painful rises” in key essentials such as milk, cheese and eggs.
“Farms are under enormous price pressures as everything from animal feed to running farm machinery weighs heavily on their finances. The process of getting from the farm to the supermarket is also energy-intensive from pasteurisation to bottling, and it all adds up,” Coles said.
“The nightmare of higher food prices is that they hurt people on lower incomes more than anyone else - because they spend a larger proportion of their income on the essentials. It means a 16.8% rise has left millions of people struggling to feed their families.”
While headline CPI figures were shown to be cooling slightly, Myron Jobson, personal finance analyst at Interactive Investor, said prices falling at petrol pumps and in clothing were being offset by rises in everyday goods and services.
“The continued rise in food prices continues to be a pain point for many Britons – with those on low income hit hardest as they spend a greater portion of their incomes on food.”
With inflation for food and drink up for almost a year and a half, Jobson noted that food inflation “is sticky because consumers are resigned to paying it as they form part of essential expenditure for many”.