London Daily

Focus on the big picture.
Thursday, Jul 03, 2025

Food Prices Continue to Rise, Despite Decrease in Energy and Grain Costs

Food Prices Continue to Rise, Despite Decrease in Energy and Grain Costs

Food prices have risen 19.3% in the past year despite a decrease in energy and grains costs.
The war in Ukraine and supply chain pressures have contributed to this increase, but as these pressures ease, retailers are facing questions about why consumers are still seeing price hikes.

Dairy products such as milk and cheese have been particularly affected, with prices rising 30% in the past year.

One reason for this could be that retailers are seeking to make up for a fall in margins from the previous year.

Retailers of dairy products saw costs rise rapidly between May and August 2022, but prices did not rise as quickly.

By examining the difference in retailer costs and prices, it can be seen if retailers have made up for the shrinking of margins from the previous year.

However, it is unclear if all retailers have done so and there may be additional factors contributing to price increases.

Inflation has finally decreased to 8.7% in April, which is the first time it has been in single digits since last summer.

Richard Lim, CEO of Retail Economics, suggests that there are many factors contributing to food inflation, and high street retailers face significant operating costs.

The Competition and Markets Authority has been called upon to investigate whether supermarket price rises are a form of profiteering.

However, Kris Hamer of the British Retail Consortium argues that the margins being made by retailers are slim and that the money may be found elsewhere in the supply chain.

Tesco's profits were down by more than half compared to the previous year, while Sainsbury's were down 5.5%.

However, one of the major suppliers of goods to supermarkets, Unilever, saw its pre-tax profits rise 21%.

The Competition and Markets Authority said they have not seen evidence of specific competition concerns in the grocery sector, but are stepping up work in the sector to ensure weak competition doesn't add to problems.

Meanwhile, producers such as dairy farmers are facing challenges with falling prices for their products.

Jeremy Hunt, the Chancellor, is looking into why food prices remain high, and there is a lag effect for farmers tied into longer-term contracts for utilities and fertiliser.

While food inflation is expected to come down in the coming months, it doesn't necessarily mean that prices will start falling.
Newsletter

Related Articles

0:00
0:00
Close
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
Poland Implements Border Checks Amid Growing Migration Tensions
Political Dispute Escalates Between Trump and Musk
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
US Senate Votes to Remove AI Regulation Moratorium from Domestic Policy Bill
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
Jury Deliberations in Diddy Trial Yield Partial Verdict in Serious Criminal Charges
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
King Charles Plans Significant Role for Prince Harry in Coronation
Two Chinese Nationals Arrested for Espionage Activities Against U.S. Navy
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
Trump Administration Considers Withdrawal of Funding for Hospitals Providing Gender Treatment to Minors
Texas Enacts Law Allowing Gold and Silver Transactions
China Unveils Miniature Insect-Like Surveillance Drone
OpenAI Secures Multimillion-Dollar AI Contracts with Pentagon, India, and Grab
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Elon Musk Critiques Senate Budget Proposal Over Job Losses and Strategic Risks
Los Angeles Riots ended with Federal Investigations into Funding
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Education Secretary Announces Overhaul of Complaints System Amid Rising Parental Grievances
Massive Anti-Government Protests Erupt in Belgrade
Trump Ends Trade Talks with Canada Over Digital Services Tax
UK Government Softens Welfare Reform Plans Amid Labour Party Rebellion
Labour Faces Rebellion Over Disability Benefit Reforms Ahead of Key Vote
Jeff Bezos and Lauren Sánchez Host Lavish Wedding in Venice Amid Protests
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
North Korea to Open New Beach Resort to Boost Tourism Economy
UK Labour Party Faces Internal Tensions Over Welfare Reforms
Andrew Cuomo Hints at Potential November Comeback Amid Democratic Primary Results
Curtis Sliwa Champions His Vision for New York City Amid Rising Crime Concerns
Federal Reserve Proposes Changes to Capital Rule Affecting Major Banks
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Trump Escalates Criticism of Media Over Iran Strike Coverage
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
Big Four Accounting Firms Fined in Exam Cheating Scandal
NATO Members Agree to 5% Defense Spending Target by 2035
Australia's Star Casino Secures $195 Million Rescue Package Amid Challenges
UK to Enhance Nuclear Capabilities with Acquisition of F-35A Fighter Jets
×