How to beat the supermarket price rises
Rising food prices are leading to horror at the checkout. While overall inflation is rising at 10.5%, food prices are up an eye-watering 16.8% in a year, and the hike in the cost of some of the everyday essentials is truly horrendous – the price of low fat milk has gone up 46%. Fortunately, there are still some ways you can keep on top of runaway food prices.
New inflation figures revealed enormous rises in the prices of vital staples over the year. Milk was the worst offender, but olive oil, sugar and cheese are all up a third or more, while butter, pasta, flour, eggs and frozen vegetables are all up more than a quarter during that time.
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It’s the result of a huge number of pressures throughout the food supply chain. Take milk, for example. Farms have been under enormous price pressures as the cost of feed and fertiliser went through the roof in the aftermath of Russia’s invasion of Ukraine. The region is a major producer of both, so the collapse of supplies pushed prices up. The dry spring also worked against them, because usually all that grass growth produces bumper quantities of milk, but dry fields failed to deliver the bonus.
The higher price of milk then passed to dairy processors, who also had to deal with pressures of their own. They’ve been hit by rising energy bills in particular, because pasteurisation is an energy-intensive process. They’ve also faced more painful packaging expenses, as higher oil prices have pushed up the cost of plastic. The supermarkets have an enormous amount of buying power, but they had to accept higher prices from the processors. On top of this, they faced other pressures, from higher staff salaries, to much bigger energy bills from heating the stores and cooling their fridges and freezers.
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And all this is for a product that starts life close to home. Where we rely on products from overseas, we also have to contend with everything from climate change to shipping costs and currency differences.
The nightmare of higher food prices is that it hurts those on lower incomes more than anyone else – because they spend a larger proportion of their income on the essentials. They also have so little room in their budgets that it’s incredibly difficult to absorb rises of any kind – especially those of almost 50%.
However, the impact is being felt across the income spectrum, and 96% of those who have seen their costs rise in the past year say the price of their food shop has risen. Two fifths of us are already doing what we can to cut back on food prices, so it’s worth knowing the changes we can make that will have a really big impact on your overall costs.
Save up to two thirds by trading down from a premium brand to the supermarket’s cheapest basics range. When my family took the more extreme version of the downshift challenge last summer, the kids didn’t embrace every shift, but the price difference in the ones they did accept was phenomenal. If this sounds like too big a step, you could start by switching to the supermarket own brands, which saves around a third.
Save 28% by switching supermarkets: if you currently shop at Waitrose, according to Which?, in 2022 you could have cut 28% off the price of your shop by switching to Aldi. And while the savings are smaller for abandoning your mid-range supermarket (Aldi is only 15% cheaper than Sainsbury’s), they’re definitely worth trying.
Save 11% by reducing food waste. The ONS says a family of four spends around £138 at the supermarket each week and WRAP claims they can save about £15 a week by cutting food waste. The best approaches include meal planning, regular checks of the fridge to see what needs eating up, and a good understanding of food you can freeze – from bread to cheese.
Save around 10% by swapping fresh food for frozen. It’s usually a cheaper way to buy everything from vegetables to meat – although it’s always worth comparing prices individually to make sure. And because it lasts longer, it tends to mean less waste too.
Save almost 10% by doing ‘the big shop’ at a larger supermarket instead of a convenience store. Which? calculated that swapping Sainsbury’s Local for a big Sainsbury’s cost around 10% less over the course of a year.
Sarah Coles is a personal finance analyst at Hargreaves Lansdown and co-presents Switch Your Money On podcast.