The price of food essentials including sliced bread, chicken breast, and fresh vegetables has leapt by as much as 10pc in a month.
Research by this newspaper in Norwich branches of the country’s six biggest grocery chains - Tesco, Sainsbury’s, Asda, Morrisons, Aldi and Lidl - reveals striking price volatility since we last surveyed them on April 14.
The Bank of England this week announced that in the 12 months to April, inflation had averaged 9pc, the highest for 40 years, but our figures show prices are continuing to rise sharply beyond that.
The price of a kilo of chicken breast fillets has gone up 9.9pc in Morrisons on Riverside, from £5.45 to £5.99 since mid April. Asda put its price up 7.3pc to £5.85 and Tesco raised its price 5.7pc, also to £5.85.
Norwich Business School associate professor Arijit Bhattacharya called the situation “alarming”, and pointed to the combined pressure that Brexit, Covid, and the war in Ukraine have put on supply chains and prices.
Supermarkets said they were doing everything they could to keep prices low, including expanding value ranges and running price-match promotions.
A medium sliced loaf of wholemeal Hovis has risen 9pc from £1.10 to £1.20 in Tesco on Ipswich Rd, and Sainsbury’s on Queen’s Rd, and Asda on Hall Rd. It was already £1.20 in Morrisons.
Broccoli is dearer than a month ago in all four stores, as are petrol and diesel, and three of the four have also increased the prices of pasta, apples, and free range eggs.
We found price reductions since last month were rare, and usually attributable to a promotion in a single chain: apples in Sainsbury’s, potatoes in Tesco, chocolate biscuits in Morrisons, oven chips in Asda.
We also price checked our basket of goods in Aldi and Lidl for the first time, finding the two discount supermarkets substantially cheaper for many products.
A 100g bag of mixed salad is only 60p in Aldi but 70p to £1.10 across the other five chains. Aldi was also cheapest for eggs, pasta, and bacon, among others.
Price wars, or price matching?
Initial analysis illuminates just how aware these companies are of each others’ prices.
Milk, which was 4p-per-four-pints cheaper in a couple of supermarkets last month, is now the same price everywhere after those two stores put their prices up.
Last month ketchup in Morrisons was £2.50, while competitors were charging £2.79 or £2.80. This month, Morrisons’ price is £2.79. Similarly Asda has increased the price of potatoes to 99p per 2.5kg, in line with the competition.
Similarly, three of the four major chains had McCain french fry oven chips at £2.50 last month while Sainsbury’s were cheaper at £2.35. But now, the same bag of chips is £2.50 everywhere.
This could be evidence of market forces keeping prices low by imposing a ceiling on any price increases, or it could suggest firms are increasing prices to competitor levels where they can, to ensure they don’t lose out by unnecessarily undercutting the competition.
A triple threat
Arijit Bhattacharya , associate professor in operations and supply chain management at Norwich Business School, explained the overlapping pressures on price.
“Covid caused a shock to supply chains and prices that we’re still feeling, so did Brexit. And now there is the war in Ukraine.
“The rise in the price of oil and gas affects the price of fertiliser hydrocarbons, as well as transportation and storage of fresh and frozen food.
“And the UK imports wheat, barley, rice, fats and vegetable oil from Ukraine. If that supply chain is disrupted supermarkets will have to source from elsewhere and that may be more expensive.”
He added: "This is alarming. We have stagflation which is very dangerous for the economy.”
Supermarket spokespeople said the chains were acutely aware of the financial pressure and working hard to provide good value.
Tesco said the company had price matched 650 basic items with Aldi prices. A Sainsbury’s spokesman said it was inflating behind the market.
A spokeswoman for Morrisons said it has recently reduced the price of 500 products. An Asda representative said Which? had judged the retailer as the best value of the traditional supermarkets.
Aldi and Lidl did not comment.
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