Food prices rose by 3.5 per cent last month — as experts warn further hikes are on the horizon
FOOD prices crept up last month — and experts warn further rises are ahead due to Budget costs and a packaging tax.
Grocery inflation hit 3.5 per cent in March, up from 3.3 per cent, according to stats.
Chocolate prices rose rapidly, particularly the cost of Easter eggs, the research by Kantar said.
Meanwhile, the hikes in butter and smoothies prices also helped make the cost of an average shop more expensive.
Despite Easter not being until April 20, sales of choc eggs hit £134million in March while a third of homes purchased hot cross buns.
As a result of squeezed finances as household budgets are hit by rising bills, Brits are trying to save on their food shopping by returning to the discounters.
Aldi grew sales by 5.6 per cent in March, the fastest rate of growth in 15 months and taking it to an 11 per cent share of the UK grocery market.
Lidl’s sales grew even faster by 9.1 per cent as it attracted 385,000 more shoppers last month.
But industry chiefs warn prices will soar even higher due to the hike in staffing costs caused by the Budget and a looming packaging tax that is set to add millions of pounds in extra costs in October.
Matt Hood, CEO of Co-op Food, has told The Sun he expects food inflation to be higher than the 5 per cent economists are predicting.
Tarsem Dhaliwal, the CEO of Iceland, is also expecting an increase due to rising National Insurance costs being passed on.
He told The Grocer: “The reality is that we have to be conscious of the fact that our suppliers are going to be passing the costs on to us, literally straight away.
“We can’t absorb all that, I don’t think any retailer can, so there’s going to be food inflation.”
Another potential headache is the threat of tariffs by US President Donald Trump.
Economists fear those could cause friction in global supply chains, which end up making commodities and grocery ingredients much more expensive too.
SCENTSATIONAL
THE founders of an eco-friendly deodorant brand have come up smelling of roses after landing a near £100million windfall from the sale of their business.
Wild Cosmetics, which makes refillable deodorant and vegan lip balms, has been sold to Unilever in a £230million deal.
The firm, which employs 100 people, was founded by Charlie Bowes-Lyon, a distant relative of the late Queen Mother, and Freddy Ward in 2020.
They still own about 43 per cent of the business.
Unilever said it admired Wild’s “innovative approach to formulations and packaging and social-first marketing”.
PROPERTY STALLS IN TAX SHIFT
HOUSE prices stalled in March for the first time in seven months ahead of stamp duty changes this month.
Figures from Nationwide showed that the average price remained flat at £271,316, compared to a 0.4 per cent monthly rise in February.
As a result, the annual price growth also flatlined at 3.9 per cent compared to the same time last year.
In Northern Ireland, the yearly figure jumped by 13.5 per cent, but in the East Midlands it was only 2.5 per cent higher. London’s rate was up just 1.9 per cent.
Alice Haine, analyst at Bestinvest, said the lack of growth reflects the unwinding of a surge in prices driven by homebuyers trying to beat stamp duty threshold changes that took effect yesterday.
Buyers are now taxed on homes over £125,000, down from £250,000.
The threshold also fell for first-time buyers, from £425,000 to £300,000.
OPENAI’S £30BN LIFT
THE maker of AI chatbot ChatGPT has closed a record-breaking £30billion fund- raising that values the business at a total of £232billion.
OpenAI, led by Sam Altman, is now one of the most valuable private companies in the world.
Mr Altman said that its latest AI image generation tool — which allows people to create their own cartoons — had attracted one million new users to its system in the first hour of its launch.
‘CARS PPI’ SCANDAL IN COURT
THE motor finance scandal that could see thousands of customers bag millions of pounds in compensation — and lenders on the hook for billions — is this week going before the UK’s top judges.
The Supreme Court is hearing an appeal on last October’s landmark ruling that declared it was illegal not to tell drivers that dealerships were earning “secret” commissions on the car finance they sold.
The City watchdog told the judges yesterday that the Court of Appeal judgement went “too far”, and said almost 99 per cent of 32million car finance agreements had involved commission payments to a dealer.
The “PPI on wheels” ruling has shaken the banking sector.
Llloyds has put £1.15billion aside to cover compensation costs, Santander has made a £295million provision and Close Brothers £165million.
Experts reckon that payouts could hit as high as £38billion.
Rebel crashes out
AN energy supplier to 80,000 households and 10,000 business customers has abruptly stopped trading.
Ofgem said it would protect Rebel Energy customer deposits and would appoint another firm to take over accounts as a “supplier of last resort”.
PERKINS SEE LOSS OF £77M
BUILDERS merchant giant Travis Perkins yesterday warned its recovery hinges on lower interest rates after it swung to a £77million loss.
It blamed weak consumer confidence as annual revenues slipped almost 5 per cent to £4.6billion due to “depressed levels”.
The firm’s operating profits dropped by almost a quarter to £152million.
As a result, Travis Perkins’ shares yesterday tanked over 8.5 per cent to 503.5p — the lowest level since the global financial crisis in 2008.
The slump is another blow for the business after its boss Pete Redfern abruptly quit due to ill health just six months after spearheading a turnaround.
Chairman Geoff Drabble yesterday blamed Travis Perkins’ problems on “strategic missteps of recent years”.
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