Prices in the shops remain much higher than a year ago, despite falls in energy and food costs.
Food prices are 19% higher than a year ago. A grocery shop that used to cost £50 is now nearer £60., but it is still not entirely clear where the solution lies.
The UN's food agency found that global wholesale prices for meat, dairy, grain, oils and sugar spiked by about 20% on average after the invasion - but those have since fallen back. They reckon that leaves 3.5p of profit to be shared, with the supermarket typically getting 2.5p while the farmer gets less than a penny.
The Unite union has accused the big supermarkets of profiteering, saying the three biggest chains saw total profits double compared with the period prior to the pandemic - but that was in 2021. Since then all parts of the food chain have been hit by unexpected cost hikes. However, contracts for goods and services are often agreed many months in advance, which means some producers and retailers will have fixed prices at the very high rates seen last year and they could be tied in to those for months yet.The good news is that the rate of wholesale inflation that food retailers face, though still high, is now slowing. That should feed through to smaller price rises on shelves - but it typically takes about six months.
By contrast, he says that prior to 2015, on average groceries were more expensive in the UK than in the EU - partly reflecting the relatively small influence of the lower cost retailers such as Aldi and Lidl at that point.By the summer, the Resolution Foundation think tank reckons households will have seen an increase in food bills of £1,000 since 2020.
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