Food to overtake energy bills in driving up UK cost of living crisis
Until now, the cost of living crisis has been most closely associated with energy bills - but soon food costs will overtake energy as the main inflation driver.
Food costs are set to overtake energy bills in driving up UK inflation this summer, a new report has warned.
The report by the Resolution Foundation has found that the cost of living crisis – until now dominated by sky-high energy bills – will soon be driven by rocketing food prices, once again hitting poorer UK households the hardest.
According to the report, whilst energy prices have risen faster in the UK it is still food that makes up the largest share of a typical household’s outgoings.
As a result, as food prices continue to rise whilst energy bills fall back this summer it is predicted that the cost of eating will become the biggest threat to people’s finances.
Food prices have increased by 25 per cent over the past year and a half, greatly impacting the squeeze on living standards in low and middle-income households.
And now, grocery bills are expected to increase again over the summer.
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According to the thinktank behind the report, it was not clear that politicians were currently prepared for another year of food price rises or that “policy debates have caught up with the scale of what is going on”.
Food price inflation reached around 19 per cent in March, the highest in almost half a century. As a result, the report asserts that food prices will be ‘contributing far more than energy to CPI inflation through the remainder of 2023.’
The report said: “By this summer, food costs will have overtaken energy bills in the scale of the shock they are administering to family finances.”
The Resolution added that it can also model the scale of the impact across individual households, suggesting that this summer 16 million households (56 per cent) will face a big shock when it comes to paying for their food.
The Bank of England governer Andrew Bailey told business leaders earlier this month that he was ‘concerned’ that food and other non-energy prices would remain elevated.
Typically, food prices in the UK fall in the summer as locally-grown crops replace those imported from abroad.
However, factory gate prices for milk, meat and other foods have accelerated, in some cases by more than 50% year on year.
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The Resolution Foundation’s report, Food for Thought, says food prices are expected to contribute “more to overall inflation than energy” in the months ahead.
“Between March and September 2023, food prices are expected to contribute around 2 percentage points to inflation each month, while the contribution of energy prices is set to fall from 3 percentage points to less than 1,” the report estimates.
The cost to the nation from higher food prices since the 2019-20 financial year would be £28bn by the end of the summer, compared with an extra £25bn cost from higher energy prices, it added.
Lalitha Try, one of the report’s authors, said: “Everyone realises food prices are rising but it’s less clear that the scale of the increases has been understood in Westminster.”
“What rising food prices have in common with surging energy bills is that they pose a greater challenge to lower-income households, who spend a higher proportion of their income on food – 15%, compared with 10% for the highest-income households in 2019-20.
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“As a result, the effective inflation rate for the poorest 10th of households was almost 50% higher compared with the richest 10th of households in March.”
Featured image – RawPixel
Eats
Viral juice brand Joe & The Juice is making a BIG return to Manchester
Daisy Jackson
Popular coffee shop Joe & The Juice is making a grand return to Manchester, taking on a huge unit in the city centre.
The Danish-based business is famed for its juices, shakes, and sandwiches, including its best-seller, the Tunacado.
Joe & The Juice used to be based within Debenhams in Manchester, but moved out of town when the retailer collapsed.
Now it’s back, signing a 10-year lease on a 2,685 sq ft unit at Manchester Arndale, in the former EE store.
With more than 300 juice bars and coffee shops around the world, Joe & The Juice’s pink branding has become a familiar site globally since its launch in 2002.
It’ll be joining the likes of Michael’s Coffee House, HOP Vietnamese, Sides, Creams, Black Sheep Coffee and Lazy Sundae in the Manchester Arndale’s ever-growing food and drink line-up.
Scott Linard, Portfolio Manager for M&G Real Estate, said: “It is great to welcome Joe & The Juice back to Manchester city centre.
“They have built a brand which has become synonymous with meeting spots across UK towns and cities, so we expect them to thrive at Manchester Arndale thanks to our close proximity to city centre businesses and students keen to catch up over a bite to eat.
“Joe & The Juice adds to our already strong F&B mix as we strive to create a full day out experience for visitors to Manchester Arndale.”
Steve Gray, Head of European Retail Asset Management at Global Mutual, added: “Joe & The Juice selecting Manchester Arndale for its city centre return highlights the continued demand we are seeing from international F&B and retail brands for space at the centre.
“Having a mix of established and growing brands helps to ensure Manchester Arndale continues to be an attractive destination for visitors and allows us to draw in shoppers from across the North West.”
Get Baked announces delay to first Manchester bakery – and ‘monumental’ changes
Daisy Jackson
Get Baked has shared another major update on its move to Manchester – and while things are delayed, the plans are looking bigger than ever.
The viral bakery, famed for its gigantic chocolate ‘Bertha’, was set to open in the Northern Quarter in November.
But they’ve now confirmed the whole process has been delayed until February or spring next year.
The good news is that it’ll be worth the wait – Get Baked is now taking over the unit next door on Stevenson Square too, so it’s an even bigger space for its incredible coffee, pie, and a slice of its legendary 24-layer chocolate cake.
The Leeds-founded brand then teased that they’re bringing ‘monumental changes to our existing offering’ – and ones that ‘nobody will have seen coming’.
Whatever those changes are, they’ll then be rolled out to Get Baked’s Headingley store too.
Summing up what to expect in Manchester, they wrote: “It’ll sort of be like if Greggs shagged Gail’s but it happened in America so there’s sprinkles and unhealthy sh*t just absolutely everywhere.”
And explaining the delay, they said: “I announced the opening of Manchester a few months ago now, and explained that we were hoping for a November opening.
“That obviously hasn’t happened, which is sad, and unfortunately if you miss November, December is a bit of a write off because of Christmas, and so is January because tradespeople like to go back to work half way through the f*cking month.
“In all honesty though, even February is looking unlikely.
“The delay started (oxymoron?) because the renovation of our bakery took a lot longer than planned — we have doubled the size of the space that we moved into earlier in the year, which has been a lot of work, and it’s still ongoing.
“We have already outgrown the newly doubled space, but luckily for us, the unit next door to the one we have just taken, is now up for lease.
Get Baked announces delay to first Manchester bakery – and ‘monumental’ changes
“So, we’re taking that space too, which will mean not only will I be sh*tting my pants at the thought of our overheads, but we’ll also be in a position where we can finally rollout stores the way we want to.”
Their statement also said: “In regard to the pending concept changes, I’ll leave you with this…
“In 2021 when I restarted Get Baked, I had a vision to create my own version of Greggs.
“Greggs is a truly wonderful situation, but it’s got too big for its boots in many ways hasn’t it.
“I’ve never been able to live out my fantasy of creating my version of Greggs, but half a million slices of Bruce (and Bertha) later, I’m nearly there. F*ck Greggs?”
You can keep up with the latest updates on Get Baked Manchester HERE.
Georgina Pellant -
23rd May 2023 
