Martyn James: Should I be worried about food prices?

Fuel prices are already rocketing, but we’re not going to see price increases in energy until the next price cap comes in (on July 1). Mortgage rates are fluctuating quite a bit and inflation is also going up – though the experts seem to think it won’t creep too far over 4 per cent. But over the last few weeks, it’s the cost of food that’s been concerning people.

So what’s going on and should you be worried about food prices? Well, it’s complicated, but I’ll do my best to explain what the coming months might hold for our weekly supermarket shop.

What factors affect the price of our food?

Food prices were already increasing due to a range of factors. For example, the war in Ukraine had a major impact on the price of grain and some cooking oils. Meanwhile, poor harvests in recent years have led to huge increases in the wholesale price of chocolate and coffee.

However, the war in Iran has direct and indirect impacts on the prices we pay for food. A direct consequence is the cost of energy required to produce food in the UK and abroad has significantly increased. Farmers use a type of fuel for farm machinery (and other commercial vehicles) called red diesel – it’s literally dyed red – that is taxed at a lower rate. But prices for red diesel are also rising.

Next up, fertiliser – synthetic nitrogen fertiliser to be precise – is largely derived from natural gas. So the cost of growing things is increasing, currently by up to 29 per cent. Farmers have told me that labour costs are also having an impact.

On top of that, the costs of transporting groceries, from shipping to trains and haulage, are all also increasing. And finally, competition from other countries, sectors and suppliers pushes up prices.

Are supermarkets profiteering from the conflict in the Middle East?

Despite claims to the contrary, there’s no evidence that supermarkets are profiteering from the war in Iran. In fact, data from the British Retail Consortium suggests supermarkets are currently heavily discounting some goods to keep consumer confidence up. Supermarkets are under a lot of scrutiny and are concerned about anything that might suggest they are profiteering. But these discounts won’t be tenable long-term, so expect prices to creep up on household staples like milk and bread soon.

What about inflation?

Inflation is how we measure how the cost of goods are increasing or decreasing. This is usually shown as a percentage in comparison to the same time last year. There are a lot of things that go in to the Office of National Statistics monthly data, from food prices to fuel and from airline fares to energy bills. At present, food inflation is currently at 3.1 per cent higher than this time last year, which is down from 3.4 per cent in March – largely as a result of discounting.

What prices are going up fastest?

You’ll already have noticed some price increases in your local supermarket. According to research from Which?, chocolate, fish, meat, bakery goods and ready meals are where we are seeing the biggest rises.

What can I do?

Most of the experts I speak to tell me we are going to start to see the rise in the cost of some goods in the next couple of months. But don’t panic just yet.

Stock up on non-perishables like tins or pasta. And don’t forget that frozen fruit and vegetables have just as many nutrients as fresh ones if you want to stay healthy. Make full use of supermarket loyalty schemes to get the best discounts. Check out the ‘world’ sections in the supermarket too for staples like flour, nuts and oil, which are often much cheaper.

If you are struggling, apps like Olio and Too Good To Go have free or discounted goods. Many of the warehouse cash and carry stores have affordable membership options too.

Martyn James is a leading consumer rights campaigner, TV and radio presenter and journalist. Read more from him at this link.