Poorer households witnessed sharper cost-of-living food price rises – experts

The cost of the cheapest groceries jumped more sharply than more premium brands as poorer households came under increased pressure during the cost-of-living crisis, according to research.

The Institute for Fiscal Studies said it found “cheapflation” between 2021 and 2023 hit households with tighter budgets.

The research showed that poorer households paid 29.1% more for their food over the period, while much wealthier households witnessed a 23.5% increase.

Food and drink inflation surged from 2021 in the face of post-pandemic supply and labour pressures and was accelerated further in 2022 after the Russian invasion of Ukraine caused energy prices to spike.

As a result, food drink prices rose by 28.4% between September 2021 and September 2023, compared with overall Consumer Price Index (CPI) inflation of 15.7% for the period.

Nevertheless, the IFS said this inflation was disproportionately focused towards typically cheaper products.

The research found that grocery items that were among the cheapest 10% in each spending category, such as milk, pasta and butter, rose by 36% over the two-year period, while more expensive versions of the same items rose by just 16%.

During the cost-of-living crisis, British households also shifted towards cheaper varieties of goods over this period to deal with the pressure on their budgets.

The share of household spending on the cheapest 10% of products grew by 2.2 percentage points between 2021 and 2023.

Tao Chen, an IFS research scholar, said: “Widespread cheapflation pushed up the prices of the most inexpensive varieties of grocery products over the last two years.

“This hit poorer households harder.

“Individual households will almost always experience a different rate of inflation to headline numbers such as the CPI because these measures are based on average consumer spending patterns across the economy.”

It came as fresh inflation data from the Office for National Statistics found that inflation ticked up to 2.2% in July, reflecting the first monthly increase since last year.