Waitrose boss warns of looming price hikes
So what will be hit, why, and just how bad are things going to get?
InflationPrice told The Sun that the rises we have seen so far are just the beginning. He added: "We're seeing input food inflation of around 3-3.5%, but we expect it go up to as much as five." He added: "In some commodities, the increases will be massive." The stores will try to absorb as much of this as possible, but inevitably costs will be passed on.
The British Retail Consortium said earlier this week that price inflation was likely to average around 5% this year. The problem is that a huge number of crops have been hit by bad weather this year .
Why?In the UK the problem was the rain - in fact the Met Office has confirmed it was the second wettest year on record - and that ongoing problems mean that many farmers have not planted for next season. It means that the cost of all vegetables is likely to rise dramatically this year, so many families will struggle to afford healthy meals.
Elsewhere drought was the issue, including widespread drought in the USA. This hit the price of things like wheat. Wheat is currently 39% more expensive than this time last year, which feeds into higher prices for all sorts of goods - including bread. The price of soya beans is also up 25%. Given that this makes up so much of animal feed, it means that the price of meat is on the up too.
This typically takes months to feed into food costs, so we are yet to fully feel the pain of increased prices. We won't see prices go up 25%, because the actual cost of the produce itself is just a portion of what we pay in the supermarkets - alongside packaging, transport, marketing and a host of other things. However, it's a sign that things are not going to get any better.
It seems, therefore, that we are going to have our work cut out this year if we are to continue to afford rising food bills.