An 'Exceedingly Good' reason to switch from big brands to own brand grocery products
Some branded food and drink products at the supermarket have more than doubled in price in the last 12 months, Which? has found, as the consumer champion calls on these major retailers to help struggling shoppers by stocking budget-range alternatives in smaller stores.
In July, Which? analysed the prices of almost 26,000 food and drink products for its food inflation tracker at eight major supermarkets – Aldi, Asda, Lidl, Morrisons, Ocado, Sainsbury’s, Tesco and Waitrose – to see how individual product prices are being affected.
This month, Which? focused on branded products, which despite having a lower rate of inflation year on year (12.2%) than supermarket-own brand standard ranges (14.6%) and budget ranges (24.3%), tend to cost more overall.
To guide supermarkets in taking the very important step of stocking essential budget-line items in supermarket convenience stores, Which? has launched a set of key tests. This will ensure that major supermarkets – especially those with the most convenience stores in the UK such as Tesco and Sainsbury’s – not only stock budget ranges but that these items are wide-ranging to include healthy products, affordable as well as consistently available and easy to spot in store.
Branded snack foods saw the largest increases overall according to Which?’s latest inflation tracker. The branded product with the single largest price increase year on year was Mr Kipling Chocolate Slices 6 pack at Tesco, which went from £1.16 on average in 2022 to £2.66 in July 2023 – a shocking increase of £1.50 or 129 per cent. Similarly, Mr Kipling Bakewell Cake Slices x6 at Sainsbury’s went from £1.38 to £2.75 an increase of £1.37 or 99 per cent.
At Asda, it was a branded yoghurt that saw the worst year-on-year inflation, with Lancashire Farm Natural Yogurt 1kg and Lancashire Farm Fat-Free Natural Yogurt 1kg going from £1 to £1.80 – a hike of 80 per cent.
Meanwhile, at Morrisons, Pilgrims Choice Extra Mature Grated Cheddar 180g and Pilgrims Choice Sliced Extra Mature Cheddar 150g both went from £1.20 to £2.11 a hike of 76 per cent.
All food prices have been impacted by the increased cost of animal feed, fertiliser and fuel as well as energy and labour costs but there have also been poor harvests, bird flu and a weaker pound compounding the issue.
Which?’s tracker found that year-on-year supermarket food inflation has dipped, this time from 15.4 per cent in the one month to the end of June to 13.8 per cent for the one month to the end of July.
However, when Which? looked at the rate of inflation over two years, it was 25.6 per cent in the three months to the end of July 2023 compared with the same period in 2021 – more closely reflecting changing prices since cost of living pressures emerged.
There were notable falls in inflation for products like milk and butter that have been subject to well-publicised price cuts in recent months. The rate of inflation of butter and spreads in July was 6.3 per cent compared to 10.9 per cent in June and 14.1 per cent for milk in July compared to 19 per cent in June.
However, in both cases, prices are still significantly higher compared to what shoppers were paying before the cost of living crisis, showing the challenge many shoppers are still facing to afford everyday essentials.
Even with inflation slowing, food prices are expected to remain high for the rest of the year according to the Bank of England, with speculation from its chief economist that prices will never return to pre-pandemic levels. This means huge pressure for millions, especially families and people on low incomes who have struggled to cope with rising costs month after month.
Which? knows the importance of budget ranges to help people save money in tough economic times. The consumer champion’s previous research found that two-thirds (67%) of consumers feel that supermarkets are ripping people off with convenience store prices and nearly half (45%) of people struggle to find affordable food in convenience stores. Over half (57%) of people agreed that more budget ranges in convenience stores would help them.
In July, the Competition and Markets Authority also highlighted that consumers relying on convenience stores – which it agreed were more expensive – cannot adequately benefit from competition to the full extent of those with access to large supermarket stores.
Which? has been calling on the big supermarkets that also operate convenience stores – Tesco, Sainsbury’s, Asda and Morrisons – to stock essential budget range items in smaller stores and has today launched key tests for them to show that they are willing to do this in a way that will make a difference.
The criteria, prioritising those in need, reinforces the need for supermarkets to stock their convenience stores with a range of budget items that include items which support a healthy diet such as tinned, frozen or fresh fruit and vegetables and other staple foods needed to make healthy meals.
Morrisons have already begun to roll out budget lines in its convenience stores, setting an example for others to follow and showing that major supermarkets do have the ability to make a simple change which will make a huge difference to the people most in need who rely on smaller stores.
Tesco has also announced that it will be introducing cheaper own-brand range items in convenience stores. Which? believes this is a significant step in the right direction and will save their customers money. However, the product examples given are not the cheapest option the retailer stocks. Which? is calling for all supermarkets’ convenience stores to provide products from their budget ranges as these are generally much cheaper than supermarket own brands.
Sue Davies, Which? Head of Food Policy, said:
“The scale of price hikes to some branded products at the supermarket over the last 12 months is barely believable and highlights the huge pressure faced by shoppers, especially families and those on low incomes. “With food prices expected to remain high for the rest of the year, Which? is calling on supermarkets to ensure expensive convenience stores are stocked with a range of budget items that support a healthy diet – and setting key tests that they can work towards to show they are willing to make a meaningful difference for their customers most in need.”