The growing cost of living crisis in Britain has seen grocery price inflation hit its highest level in ten years, with prices rising by over five per cent over the past four weeks.
A report from the London-based data analytics and brand consulting firm Kantar found that price inflation at grocery stores in the UK has risen to the highest level since April of 2012, with an increase of 5.2 per cent recorded over the past month.
The firm found that consumers are increasingly turning towards store brand (own label) products instead of more expensive brand label products, rising by 0.7 per cent despite the overall downward purchases of all groceries. In the 12 weeks leading up to March 20th, supermarket sales fell by 6.3 per cent.
Fraser McKevitt, the head of retail and consumer insight at Kantar, said: “What we’re really starting to see is the switch from the pandemic being the dominant factor driving our shopping behaviour towards the growing impact of inflation, as the cost of living becomes the bigger issue on consumers’ minds.”
“More and more we’re going to see consumers and retailers take action to manage the growing cost of grocery baskets,” McKevitt added.
The decline in supermarket sales was linked by Kantar to the rising cost of fuel, with McKevitt saying: “Higher fuel prices could be playing a role here too as people try to save petrol by visiting the supermarkets less often – something for us to keep a close eye on over the coming weeks.”
The pocket pinch at the supermarket comes as inflation overall has climbed to the highest levels in 30 years in the country and before the war in Ukraine has had a chance to truly disrupt global food markets.
Despite this, the government, which campaigned on lowering taxes in its 2019 manifesto upon which it was elected, has continued with its high tax agenda in order to pay off the massive spending spree accrued during the Chinese coronavirus crisis and ensuing government lockdowns of the economy.
When pressed during a parliamentary hearing on Monday by Labour MP Angela Eagle, who questioned Chancellor Rishi Sunak if he still considered himeslf a “tax-cutting Chancellor”, the Tory politician denied ever making such a claim.
“I have not actually said that. What I have said very clearly is, I am a chancellor who has had to deal with the pandemic,” he replied.
“I have dealt with the pandemic, and then, given the damage the pandemic has done, with a desire to continue investing in more nurses, greater social care, more police on the street, levelling up, the choice we had was to either cut public spending significantly, or continue delivering on our plans… but make sure it is paid for,” Sunak said per The Telegraph.
Contrary to the latest claims from Mr Sunak, in a jointly penned article with Prime Minister Boris Johnson in February, the Chancellor and the PM styled themselves as “Thatcherites” who were supportive of lowering taxes — which have reached their highest burden since the 1950s.
“We are tax-cutting Conservatives,” Sunak and Johnson claimed, with the Chancellor going on to state: “I firmly believe in lower taxes.”
While the Spring Statement from the Chancellor raised the threshold for paying the national insurance hike and introduced a temporary 5p cut to the fuel duty, the government has been criticised for failing to deliver meaningful tax cuts during the cost of living crisis.
“We need tax cuts to promote growth and to ease the squeeze on real incomes,” said Sir John Redwood.
“The Treasury has collected billions more tax this year than they planned thanks to faster growth. Promoting growth is the way to get the deficit down,” the Conservative MP added.
A key area for potentially helpful tax cuts would be to those levied against electricity, with some 30 per cent of average household bills going towards subsidies for green energy projects or directly to the government in tax. Earlier this month, the Trades Union Congress (TUC) said that energy bills will likely rise 14 times faster than wages this year.
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