Grocery inflation hits new record high – and the worst is yet to come
UK grocery inflation has hit a new record high – with customers now paying hundreds more a year – but there are warnings the worst is yet to come.
As inflation for food hits 17.5%, Kantar Worldpanel reported households are now facing a potential £837 hike in the annual cost of their regular basket – although consumers are increasingly shopping around in a bid to find the best value.
Its latest report said footfall was up in “every single grocer” over the four weeks to March 19, with households now visiting three or more of the top 10 retailers per month on average – with chains “battling it out” to get buyers through their doors.
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But amid concerns over the impact of salad shortages in some UK supermarkets, Kantar said shoppers had instead turned to independents to plug any gaps in availability.
Its head of retail and consumer insight, Fraser McKevitt, said: “Despite concerns about shortages, the number of baskets containing tomatoes, cucumbers or peppers in the 10 major grocers stayed at 17% in March, the same as February.
“For any shoppers who couldn’t get what they wanted in larger supermarkets, the independents stepped in, with the volumes of tomatoes, peppers and cucumbers in baskets rising by 32%, 26% and 21% respectively in these stores.”
The cost of sugar has helped drive inflation
‘The worst is yet to come’
Shop prices are now 8.9% higher than they were a year ago, up from February’s 8.4% increase, according to the British Retail Consortium (BRC)-NielsenIQ index.
The rising cost of sugar, coupled with high manufacturing costs, has contributed to price rises for chocolate, sweets and fizzy drinks. Fruit and vegetable prices have also risen as poor harvests in Europe and North Africa limited availability.
But there are warnings the UK has not seen the worst of the surging prices.
BRC chief executive Helen Dickinson said: “Shop price inflation has yet to peak.
“Food price rises will likely ease in the coming months, particularly as we enter the UK growing season, but wider inflation is expected to remain high.”
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Mike Watkins, head of retailer and business insight at NielsenIQ, said: “Inflation continues to have an impact on the spending power of shoppers and increased energy bills from April will add more pressure.”
“Since food prices have risen retailers have seen more visits but less basket spend, as shoppers manage their weekly food bills by shopping little and more often and seeking out the lowest prices.
“And as Easter approaches some high street retailers will also be offering discounts and promotions to encourage customers to spend.”
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Unexpected rise in UK inflation
The fastest-growing supermarkets
Mr McKevitt said shoppers were increasingly taking advantage of store loyalty cards, with nine in ten consumers having one in their wallet, while shoppers are also picking more own-label lines, sales of which are up by 15.8% during the period compared to last year.
But he added: “People are keeping some space in their baskets for the brands they know and love. Outside the discounters Aldi and Lidl, branded goods still make up 52% of the market and sales grew by 7.2% over the past month, the fastest rate we’ve seen since February 2021.
Kantar said Lidl was the fastest growing supermarket with sales rising by 25.8%, earning it a market share of 7.4%.
Tesco remains Britain’s largest grocer with a 26.9% share of the market, while Sainsbury’s is on 14.8% and Asda 14.3%, according to the data.
The world’s most valuable company has reported another series of expectation-beating results, heading off fears of the AI bubble bursting for now.
Nvidia’s revenue reached $57bn in the three months to October, higher than Wall Street estimates and the company’s own guidance.
That’s up 62% on the same time last year, and has been described by the business as an “outstanding” quarter.
Money blog: Ryanair flights to EU banned in ‘unprecedented’ decision
A profit measure called earnings per share was also better than expected at $1.30.
It matters as Nvidia has powered the artificial intelligence (AI) boom through its computer chips, which are key parts in AI chatbots such as ChatGPT.
Nvidia has major tech companies as clients and acts as a good proxy for whether the tens of billions of dollars invested in AI is paying off.
Its chief executive, Jensen Huang, has been described as the Godfather of AI and watch parties were organised for those looking to follow the Wednesday evening announcement.
The company has been a massive beneficiary of the push to put money into AI, with its share price reaching stratospheric highs.
In October, it became the first worth $5trn (£3.83trn), about the size of the German economy, Europe’s largest, and double the UK’s benchmark stock index, the FTSE 100.
What’s been announced?
Revenue from data centres reached a record high of $51.2bn, more than £10bn higher than the three months previous.
The outlook is for continuing strong sales in the final three months of the financial year, as the company forecasts revenue will be roughly $65bn.
Read more:
Nvidia boss defends against claims of bubble by ‘Big Short’ investor
Inflation slows to 3.6%, but food costs shoot upwards
Demand for Nvidia products continues to surpass expectations, while the business is “still in the early innings” of AI transitions, its chief financial officer Colette Kress said.
Mr Huang said sales of its blackwell chips are “off the charts” and its cloud graphics processing chips (GPUs) are “sold out”.
Why it matters
Developing AI infrastructure, like the construction of data centres, has been a significant contributor to US economic growth, as measured by gross domestic product (GDP).
A faltering of AI expansion, therefore, impacts the US economy, the world’s largest, which in turn affects the UK and global economies.
Anxiety around the massive valuations tech companies have accrued, on the hope of AI revolutionising the world, is likely to be staved off by the results announcement.
A fall in these tech company valuations could have meant a drop in the value of pension pots or savings.
Just seven dominant tech companies, many of which have borrowed to invest in AI, make up more than a quarter of major US stock index, the S&P 500.
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Could the AI bubble burst?
In the last year alone, Nvidia’s share price has risen more than 230%.
Some, including US trader Michael Burry, famous for being played by Christian Bale in the Hollywood film The Big Short, have effectively bet that Nvidia’s share price would fall.
Addressing the topic of an AI bubble, Nvidia’s founder, Mr Huang, said, “From our vantage point, we see something very different”.
What next?
Regardless of the figures released on Wednesday evening, significant market moves were anticipated, given the attention paid to the results and the significance of the company.
Nvidia shares rose as much as 4% in after-hours trading.
The results also boosted the share price of its chip-making competitors like Broadcom and Advanced Micro Devices.
For now, the AI bubble remains intact.
Business
Budget 2025: Consumer confidence falls as speculation ramps up – but London mayor welcomes major rail investment
Consumer confidence has tumbled amid rampant speculation about what the chancellor will announce in the budget, figures show.
The British Retail Consortium (BRC) blamed “strong hints” from the government of income tax hikes for the public’s falling expectations of how much they’ll spend over the next three months – even as Christmas beckons.
While a planned increase in income tax rates was scrapped last week, Sir Keir Starmer has refused to rule out freezing income tax thresholds – which the Conservatives argue amounts to a tax rise by stealth because it drags people into paying higher rates even if their wages increase.
BRC chief executive Helen Dickinson said months of uncertainty had “heightened public concern about their own finances and the wider economy”.
Consumer expectations for the state of the economy over the next three months have fallen significantly to minus 44, down from minus 35 in October, according to data from the BRC and Opinium.
Ms Dickinson said action was needed from Rachel Reeves to “bring down the spiralling cost burden facing retailers”, which she said would “keep price rises in check”.
Read more: Inflation eases but food costs rise
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Is chancellor to blame for food price rises?
Signs of ‘fragile’ recovery in jobs market
In slightly more encouraging news for Ms Reeves ahead of her statement next Wednesday, new research suggests the jobs market may be on the up.
The Recruitment and Employment Confederation said the number of new job adverts last month was 754,359, up by 2.1% from September, taking the total to more than 1.6 million.
Ms Reeves’s decision to hike national insurance contributions for employers in last year’s budget was blamed for a slowdown in the market, and a rising unemployment rate.
The report said there has been an increase in adverts for medical radiographers, delivery drivers and couriers, and further education teaching professionals.
But it warned the apparent recovery was “fragile”.
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PM challenged on budget leaks
Reeves set to back DLR extension
One man looking forward to the budget is Sir Sadiq Khan, who has welcomed reports that London’s DLR is set to be given funding for an extension.
According to the Press Association, the chancellor will back an extension to the Docklands Light Railway to Thamesmead at a cost of £1.7bn – unlocking thousands of new homes.
Thamesmead has been notoriously short of public transport links ever since it was developed in the 1960s.
Thamesmead in southeast London straddles the boroughs of Bexley and Greenwich. Pic: PA
The plan would see the line extended from Gallions Reach, near London City Airport, and include a new station at Beckton as well as in Thamesmead itself.
Sir Sadiq said the DLR extension “will not only transform travel in a historically under-served part of the capital but also unlock thousands of new jobs and homes, boosting the economy not just locally but nationally”.
It is also expected to unlock land for 25,000 new homes and up to 10,000 new jobs, along with almost £18bn of private investment in the area.
The world’s most valuable company has reported another series of expectation-beating results, heading off fears of the AI bubble bursting for now.
Nvidia’s revenue reached $57bn in the three months to October, higher than Wall Street estimates and the company’s own guidance.
That’s up 62% on the same time last year, and has been described by the business as an “outstanding” quarter.
Money blog: Ryanair flights to EU banned in ‘unprecedented’ decision
A profit measure called earnings per share was also better than expected at $1.30.
It matters as Nvidia has powered the artificial intelligence (AI) boom through its computer chips, which are key parts in AI chatbots such as ChatGPT.
Nvidia has major tech companies as clients and acts as a good proxy for whether the tens of billions of dollars invested in AI is paying off.
Its chief executive, Jensen Huang, has been described as the Godfather of AI and watch parties were organised for those looking to follow the Wednesday evening announcement.
The company has been a massive beneficiary of the push to put money into AI, with its share price reaching stratospheric highs.
In October, it became the first worth $5trn (£3.83trn), about the size of the German economy, Europe’s largest, and double the UK’s benchmark stock index, the FTSE 100.
What’s been announced?
Revenue from data centres reached a record high of $51.2bn, more than £10bn higher than the three months previous.
The outlook is for continuing strong sales in the final three months of the financial year, as the company forecasts revenue will be roughly $65bn.
Read more:
Nvidia boss defends against claims of bubble by ‘Big Short’ investor
Inflation slows to 3.6%, but food costs shoot upwards
Demand for Nvidia products continues to surpass expectations, while the business is “still in the early innings” of AI transitions, its chief financial officer Colette Kress said.
Mr Huang said sales of its blackwell chips are “off the charts” and its cloud graphics processing chips (GPUs) are “sold out”.
Why it matters
Developing AI infrastructure, like the construction of data centres, has been a significant contributor to US economic growth, as measured by gross domestic product (GDP).
A faltering of AI expansion, therefore, impacts the US economy, the world’s largest, which in turn affects the UK and global economies.
Anxiety around the massive valuations tech companies have accrued, on the hope of AI revolutionising the world, is likely to be staved off by the results announcement.
A fall in these tech company valuations could have meant a drop in the value of pension pots or savings.
Just seven dominant tech companies, many of which have borrowed to invest in AI, make up more than a quarter of major US stock index, the S&P 500.
Please use Chrome browser for a more accessible video player
Could the AI bubble burst?
In the last year alone, Nvidia’s share price has risen more than 230%.
Some, including US trader Michael Burry, famous for being played by Christian Bale in the Hollywood film The Big Short, have effectively bet that Nvidia’s share price would fall.
Addressing the topic of an AI bubble, Nvidia’s founder, Mr Huang, said, “From our vantage point, we see something very different”.
What next?
Regardless of the figures released on Wednesday evening, significant market moves were anticipated, given the attention paid to the results and the significance of the company.
Nvidia shares rose as much as 4% in after-hours trading.
The results also boosted the share price of its chip-making competitors like Broadcom and Advanced Micro Devices.
For now, the AI bubble remains intact.
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