UK Supermarkets Plans to Price Cap on Food Items

The rate of price rises in the supermarkets of the United Kingdom hit a new high in May 2023 due to chocolate, coffee, and non-food goods. The British Retail Consortium (BRC) and NielsenIQ said that the overall inflation rate at grocers is 9 percent. The prices for fresh food have fallen marginally, and the costs of some commodities like cocoa and coffee have jumped.

The government asks supermarkets to set a limit for prices on food items to help with inflation, which would be voluntary, and limit the price of basic foods like bread and milk. But the BRC on dismissing caps states that the government should ignore the delays caused due to government services, so resources could be directed towards keeping prices low. Sainsbury cut the cost of over 40 of its own-brand products, including cheese, cream, and yogurt. The commercial food director of Sainsbury said that if the suppliers' purchasing price is less, the company would also pass those savings on to customers.

The BRC and NielsenIQ figures show that food inflation fell to 15.4 percent overall. Even after the fall, the figure is the record's second-highest rate of food inflation. But a decline in the rate of price rises does not mean food prices have fallen; it implies they are going up at a slower pace. Simultaneously, the price rises for non-food goods grew from 5.5 percent in April to 5.8 percent in May 2023, despite supermarkets making heavy discounts on goods like books, footwear, and home entertainment. The fresh produce also showed a slowdown in price rises from 17.8 percent to 17.2 percent in May 2023. Also, ambient food prices increased from 12.9 percent to 13.1 percent in May 2023. It is the fastest growth on record for ambient foods prices, as the BRC and NielsenIQ said.

Recently, the official figures showed that the inflation rate fell sharply to 8.7 percent in April 2023; it fell for the first time under 10 percent since August 2022. But the drop was less than the economists and investors expected after the grocery price rises remained closer to the highest rate in 45 years.