SHOPPERS have been hit by the biggest food price rise on record, with annual grocery bills now £811 higher than a year ago.
Food inflation shot up to 17.1 per cent in February and supermarket prices are now the second biggest worry for people, after soaring energy bills, according to Kantar.
Households are unable to escape many of the pressures of the cost-of-living crisis — such as sky-high bills for gas, electricity, fuel, rent and mortgages — and a quarter of households now say they are struggling.
However, shoppers are managing their tight budgets and limiting their own inflationary pressures by making savvy switches to cheaper own-brand labels and discount supermarkets.
Sales of own-brand groceries rose by 13.2 per cent in the past month, well ahead of more expensive branded products, which rose by 4.6 per cent.
Iceland Foods boss Richard Walker said frozen veg sales jumped by a quarter recently as shoppers swapped fresh food for cheaper meals.
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Meanwhile, customers are flocking to discount supermarkets, such as Aldi and Lidl.
Their growth is now four times faster than that of their traditional rivals, with sales rising by 26.7 per cent and 25.4 per cent respectively in February.
Aldi recently overtook Morrisons as the country’s fourth biggest supermarket.
Morrisons has been on a losing streak of late and was the only supermarket with falling sales.
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The firm, which is now private-equity owned, has been accused of not being sharp enough on prices in the face of intense competition.
Morrisons, however, said that its recent price-cutting campaign had been noticed by customers and its performance was already starting to improve.
Food manufacturers have warned that prices will continue to rise as they continue to pass on their own higher costs to consumers.
Supermarkets and their suppliers have been battling it out over how much of this inflationary pressure can be passed on to customers.
The retailers argue that large manufacturers, such as Unilever, Nestle and Kraft Heinz, have bigger profit margins and are therefore capable of absorbing more costs.
Research has already found that budget food prices have risen faster than the rest of the market — hitting the poorest shoppers hardest.
Love … sick
LOVERS are still prising open their wallets in a bid to woo — but sales of cough and cold treatments are also on the rise.
Despite shoppers having squeezed budgets in the “cost of loving” crisis, food retail figures show the best way to anyone’s heart is still through their stomach.
On Valentine’s Day, steak sales rose by a quarter compared with the previous week, chilled ready meals soared, sparkling wine sales doubled and an extra £5million was spent on chocolates.
Industry experts said it shows people are trying to recreate the fanciness of going to a restaurant with the cheaper alternative of eating at home.
But it came as a big passion-killer — seasonal coughs and colds — seemed to be on the rise, with sales of cold treatments up by 82 per cent compared with last year, while sales of cough lozenges were also some 70 per cent higher.
M&S pay boost
MARKS & SPENCER is investing almost £60million to raise staff pay for the third time in a year — taking the average hourly wage to £10.90.
The retailer said the latest increase from an average of £10.20 means staff earn £150 more a month than a year ago.
London shop staff’s pay will rise to £12.05 from £11.25.
Retailers have boosted wages amid concerns employees would struggle to afford the food which they were stacking on the shelves.
M&S boss Stuart Machin said: “We need to help colleagues.”
THE number of Brits living in fuel poverty rose by 100,000 last year to 3.26million, figures revealed.
About 7.4million households now spend more than 10 per cent of their total income on energy, with single parents the ones most hit by the big bills.
Argos jobs risk
SAINSBURY’S is putting 1,400 jobs at risk with plans to shut two of its Argos depots.
It bought Argos and Habitat for £1.3billion in 2016 when it had 600 standalone shops.
In the pandemic Sainsbury’s said it would restructure the business to close virtually all its Argos high street stores and follow its plan to open click-and-collect counters inside its supermarkets instead.
CEO Simon Roberts said the supermarket’s aim was “to make our business simpler, more efficient and more effective for customers”.
Ocado's taking a £500m hit
OCADO’S losses have leapt to half a billion pounds, adding to doubts about a firm once hailed as the future of grocery retail.
It started out as a techy warehouse company delivering Waitrose online orders.
But it now has a retail joint venture with Marks & Spencer instead and sells its software, smart warehouses and robotic technology to retailers abroad.
The group posted flat revenues of £2.5billion but losses rose from £176.9million to £500.8million.
It now has 12 international warehouses but the overseas arm is loss-making.
During the pandemic its retail unit boomed but growth has since slumped, and it reported a £4million loss, compared with a £150million profit last year.
In a bid to revive growth it is relaunching its price match scheme, scrapped in 2021, to peg 1,000 of its products against against Tesco.
BUILDERS merchant Travis Perkins cut 400 jobs and shut 19 sites at the end of 2022 as it braces for a downturn in the construction sector.
Travis, which also owns Toolstation, said it expects the market to decline by up to 9 per cent as homeowners and companies delay projects.
This is despite rival Screwfix recently saying its tradesmen customers were still busy with work and orders.
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Travis said it cut costs by £25million last year as its own budget was put under strain by rising inflation.
Profits fell by 20 per cent to £245million last year while sales rose 9 per cent to £4.9billion.
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