Essentials such as food, electricity and water rates tend to take up the majority of family budgets, with little left over for treats and luxuries.
Now, it appears that even getting your five a day is a factor eating away at the pockets of British households. According to the Office for National Statistics, food inflation actually rose from 3.9 per cent to 4.4 per cent in July, with fruit and vegetables being the main culprits in pushing up prices.
In fact, fruit prices have risen by 10 per cent in the past year. With a 36 per cent rise in the past twelve months, it appears that the old adage “an apple a day keeps the doctor away” now refers to the cost of the traditional favourite. Pears, meanwhile, have experienced a 30 per cent rise in price.
Industry experts have put the rising costs down to the poor weather experienced in many areas of the world during the harvest period in 2012, with ruined crops limiting availability and pushing up prices. Retail analyst at Shore Capital stockbroker, Darren Shirley, believes that the current trend is largely in line with forecasts made at the start of the year.
He says; “We have been saying for a while that food inflation would be pretty resilient through the first six to nine months of the year and it’s proved to be the case – the upward pressure is pretty broad based.
“We’re hopeful the residual pressure from last year will begin to wear off by the end of this year, around the fourth quarter.”
Supermarkets were forced to abandon “home grown” targets as a result of poor UK harvests, with many turning to foreign countries in order to stock their shelves. However, this piled pressure on consumers as the weak value of the pound raised the cost of importing.
Of course, last year’s poor harvest has also had a knock-on effect upon other popular foods, especially meats. Farmers must now pay more for animal feed thanks to a drop in supply, meaning that pork sausages have become 11 per cent more expensive and beef mince up 8.4 per cent on last year’s prices.
The cost of breads and cereals has climbed by 4.6 per cent, with potatoes seeing a huge 13 per cent leap in price during the period.
Yet while poor harvests certainly contributed to these budget-busting increases, it appears that a rising international population has become one of the key threats to the affordable weekly shop. Head of the Global Food Security programme, Professor Tim Benton, claims that the growing middle class in south-east Asia has increased international demand profoundly, and the world is well on its way to a global “food fight”.
With this year’s warm summer encouraging crop growth, it is hoped that food inflation will fall in the coming months. However, international demand could well see UK consumers paying increasing amounts for their weekly shop in years to come.
How do you think supermarkets could combat this issue – perhaps, like Waitrose, owning and operating their own farms would be an affordable solution?
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