Are inflationary pressures easing? Supermarket price cuts to one particular product suggest a light at the end of the tunnel.
Here’s what you need to know:
- What is the current rate of UK inflation?
- Supermarket price cuts: cause for hope?
- How to stay up-to-date with industry trends.
What is the current rate of UK inflation?
Despite dips here and improvements there, the cost of living is still high across the UK.
At its last measure in May, the UK inflation rate was expected to fall to 8.4%. However, it held firm at 8.7%, putting price inflation way above the Bank of England’s target rate of 2%.
But that’s far from the end of it, because there are plenty of products in supermarkets right now that are climbing much faster. A key product category driving this rise: dairy.
According to recent research from the Office for National Statistics (ONS), dairy products have seen stomach-churning price hikes in recent months. The price of butter, for example, climbed by 14.1% in the space of a single year, while skimmed and semi-skimmed milk increased by 28.5% and cheese shot up by (brace yourselves) 33.4%.
Why are dairy prices so high?
Of course, it’s impossible to ignore the general factors affecting inflation, like post-pandemic economic recovery and the UK’s reliance on natural gas, which skyrocketed following Russia’s invasion of Ukraine.
But, when it comes to dairy, other problems are at play, including labour market shortages.
The good news is that it’s not all cause for concern. Supermarkets across the board have started slashing the price of milk, to help overstretched customers afford the essentials. And, to ease the burden on dairy farmers, they’re also ensuring that the price cuts don’t impact producers.
Supermarket price cuts: cause for hope?
Tesco tipped the first domino, and from there, Aldi, Lidl, Ocado, and the remaining Big Four grocers Asda, Sainsbury’s and Morrisons followed soon after.
Now, milk prices sit comfortably between £1.55 and £1.65 for a four-pinter across most UK supermarkets.
According to the Evening Standard, here’s how much you can expect to pay for four pints of own-brand milk:
- Aldi: £1.55
- Morrisons: £1.55
- Sainsbury’s: £1.55
- Tesco: £1.55
- Asda: £1.65
- Iceland: £1.65
- Lidl: £1.65
- Waitrose: £1.70
If it’s a single pint you’re after, you can expect to pay between 90p and 95p, while two pints will set you back somewhere between £1.25 and £1.30.
Other essential products, including pasta, rice, and fruit juice, have also fallen in price in some supermarkets.
Hopefully, this is a sign of what’s to come. It’s certainly a clear sign that supermarkets are doing what they can to take the pressure off their customers. As Laith Khalaf of investment platform AJ Bell said, the price drop provides “some light at the end of the inflationary tunnel”.
How to stay up-to-date with industry trends
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