Mar 23, 2023
Breakfast Index Reaches New High After UK Food Shortages
(Bloomberg) -- The price of a basket of English breakfast items soared past £35 ($43) as vegetable shortages in supermarkets fueled a surprise jump in UK inflation.
Tomato prices rose 6.4% in February compared with the previous month, the second-biggest riser in the latest Bloomberg Breakfast Index behind bread. A supply crisis caused grocers such as Tesco Plc and J Sainsbury Plc to restrict sales of certain produce to three per person last month, while pictures on social media showed empty shelves across the country.
The Office for National Statistics said Wednesday that salad shortages contributed to a shock increase in the overall rate of inflation, which climbed to 10.4%. Economists had expected the rate to drop below 10%.
The crisis started with poor harvests in southern Europe and Africa due to cold weather. High electricity costs also limited supply as it had become too expensive to grow out-of-season produce in Britain’s energy-intensive greenhouses.
Overall, the average cost of products to make a traditional fry-up rose by more than 22% from a year earlier in February. It was the second straight month that the Breakfast Index increased by more than 20%.
The index crunches ONS data on the price of sausages, bacon, eggs, bread, butter, tomatoes, mushrooms, milk, tea and coffee.
Using product sizes provided by the ONS, the total cost of English breakfast ingredients jumped by almost £6 from a year earlier to £35.10. Milk continued to show the most dramatic rise with a 43% increase from the year before. Bread gained 33% from a year ago and eggs rose 33%, while all ingredients increased in price.
“Households continued to be squeezed by inflation driven by food prices and household bills,” said Helen Dickinson, chief executive of the British Retail Consortium. She said a weaker pound has “made importing products such as vegetables from Europe more expensive.”
The ONS said that, overall, prices in UK supermarkets rose at their highest rate since at least 2005 in February. Shoppers are turning to discounters Aldi and Lidl amid the country’s worst inflation in a generation. Other grocers such as WM Morrison Supermarkets Ltd. are expanding lists of temporarily discounted items in a bid to lure customers.
--With assistance from Katie Linsell, Telma Marotto and Leonid Bershidsky.
©2023 Bloomberg L.P.