Has your family’s weekly shop hit £140? How grocery costs have soared since 2020

A £100 food shop six years ago now costs just under £140 as heatwaves and energy taxes pile pressure on future food prices, manufacturers have warned.

And the Food and Drink Federation (FDF) has said that extreme weather conditions and the war in Iran will continue to threaten food supplies while producers grapple with increased taxes and regulatory costs.

They estimate that the cost of the same grocery shop will increase another £8.90 or 6.4 per cent to £147.50 by July next year, driving up inflation.

The cost of a £100 grocery shop in January 2020 has risen by 38.6 per cent to £138.60, according to official figures.

This underscores the pressures faced by food manufacturers in the wake of Russia’s invasion of Ukraine in February 2022 and further conflict threatens to push up prices.

In a fresh forecast, the FDF said food inflation would reach just under 4 per cent by Christmas. 

This is significantly lower than an alarming 9 per cent it predicted in April for the end of the year, when it warned over the impact of the war in the Middle East.

But it said that the pace of price rises would remain sticky into next year, peaking at 6.4pc in July and remaining above 5 per cent until next Christmas.

The industry group, which represents 12,000 producers including big names such as Danone, Pladis and McVitie’s, has called on the Government to offer firms some respite and ease the pace of regulatory changes.

FDF chief executive Karen Betts said: ‘The Government does need to prioritise and pace regulation. In the last five years we have had a tsunami of regulation hitting the sector. The more you pile onto the sector,  the more these cost pressures rise.’

The group says changes in regulation and taxes amounted to an extra £2billion in costs for the sector last year.

It pointed to changes including new recycling and packaging reforms, restrictions on advertising unhealthy food and higher employer National Insurance contributions.

Food producers also want to be included in a Government scheme to provide energy-intensive industries a subsidy on their utility costs, which is currently applied to sectors like chemicals and car makers.

The FDF said the UK drought could mean one of the worst wheat harvests on record.

Livestock farmers in Britain were also affected by a lack of grass, meaning they had to use up winter reserves to feed animals, while milk supplies have been reduced as animals found the hot weather stressful and root vegetables may be hit by a lack of rain, the group said.

Globally, a ‘Super El Nino’ weather phenomenon is likely to put pressure on the supply and costs of rice, wheat, sugar, cocoa and coffee.

The World Meteorological Organization (WMO) has warned the impact of these extreme changes in weather patterns could last until at least February 2027.

Betts added: ‘Food and drink manufacturers have kept food prices as low as possible during the energy shock since the closure of the Strait of Hormuz but they can’t do this indefinitely.

‘The persistently higher costs of energy, logistics and packaging, compounded by this summer’s extreme heat mean that food prices will rise this year, and we believe that rise will be sustained into 2027.

‘As the Prime Minister has recognised, households need some breathing space. Tackling the rising costs of food production will help with the cost of living, as well as giving businesses the confidence they need to invest in a resilient food system.’

It comes as supermarkets have been locked into a price war for years in order to compete for market share. Food inflation rose to 2.8 per cent in August from 2.2 per cent in July.

The FDF’s plea for Government support follows major supermarket bosses accusing ministers of pushing up their energy bills earlier this year.

Stuart Machin, who runs Marks & Spencer, said that government levies now make up more than half of the retailer’s energy costs. ‘It’s just not sustainable for UK businesses,’ he had said.