LONDON — British supermarkets are quietly imposing big price rises on certain items to offset rising Brexit-induced costs and retain profit margins, according to analysis of government figures from price comparison site MySupermarket.
Figures published by the Office for National Statistics (ONS) yesterday found that food and drink prices rose by 1.2% in the year to March. That figure is reached by comparing a “basket of commonly bought goods” such as bread and milk.
Prices of those staple items have barely risen, with some even falling. The average price of a can of baked beans fell by 3p in the year to March.
Meanwhile, less commonly-bought items — price rises on which customers are less likely to notice — have risen dramatically. The cost of decorative candles has risen by 29%, plants, seeds and bulbs sold in supermarkets by 25%, and light bulbs by 20%.
Luxury items, such as fresh trout and cashew nuts, are up by nearly 10%.
Steve Dresser, director of consultancy Grocery Insight, told Bloomberg: “If a retailer raises the price of milk, they won’t just lose that sale, they will lose the whole basket. Retailers have to pick their battles on price.”
The move appears to be the latest in British supermarkets’ ongoing battle to retain profit margins amid increasingly difficult trading conditions which have been worsened by the price rises associated with the Brexit vote last June.
Major food brands have resorted to another tactic to retain their own margins: “Shrinkflation,” so-called because food producers are gradually reducing the size of packets of food and drink, while keeping the price the same, meaning that consumers are paying the same amount for less.
More from Business Insider UK:
- Sports Direct has chosen a 30-year-old Barnstable shop manager to stand up for staff at the company
- 10 things in tech you need to know today (AAPL, MSFT, FB, SNAP)
- Tesco’s recovery plan is ahead of schedule
- These are the 14 most prestigious law schools in Europe
- A Jeff Bezos-backed startup that helps migrants send money to family back home is launching in the UK
Business Insider Emails & Alerts
Site highlights each day to your inbox.