A full English breakfast has become cheaper for the second time since Bloomberg started a monthly index measuring the cost of ingredients a year ago.
The total price of all the components of a fry-up fell by 20 pence (26 cents) to £35.58 in July. Bloomberg’s Breakfast Index uses product sizes provided by the Office for National Statistics to crunch prices of sausages, bacon, eggs, bread, butter, tomatoes, mushrooms, milk, tea and coffee.
“Many households will find their mornings getting cheaper, with price drops in tea, coffee, milk, breakfast cereals and fruit,” said Helen Dickinson, chief executive officer of the British Retail Consortium.
Still, the cost is well above where it was a year ago, and the total price was lower in May, showing declines can prove temporary and food inflation is sticky in the UK.
Most categories in the index dropped in price from a month earlier, with the exception of sausages, eggs and bacon. The average price of the ingredients fell by 1.2% from June, compared with a 0.7% increase the month before.
There is broader cause for encouragement for consumers stocking their fridge. The rate of food inflation as measured by the Consumer Prices Index slowed in July to 14.9%, the slowest growth rate since September 2022. Figures from market research firm Kantar this week also reflected a slowdown, putting grocery inflation at 12.7%.
Supermarkets say they are cutting prices wherever possible in a bid to woo shoppers in Britain’s competitive grocery market. Discounters Aldi and Lidl are gaining market share from their more established rivals as consumers try to save pennies and buy more store-brand goods.
Britain’s antitrust regulator cleared the country’s biggest supermarkets of profiteering from high food costs last month, noting that their operating margins have narrowed since the onset of the cost-of-living crisis. Still, the Competition and Markets Authority said some retailers did not display prices as clearly as they could, making it hard for shoppers to determine value.
Asda, the UK’s third-biggest grocer, said this week it has a “constant focus” on keeping prices low. The retailer cut prices on more than 200 products last month and has locked prices on 500 items until the end of August.
“Whilst we continue to see inflation headwinds in our cost base, wherever we are seeing reductions in commodity prices – such as wheat and milk – we are doing the right thing to pass those savings to our customers,” said Michael Gleeson, chief financial officer at Asda.
Still, double-digit food inflation is weighing on shoppers and Bloomberg’s index shows that most elements of the English breakfast were more costly in July than a year earlier.
The average cost of fry-up ingredients has increased by almost 12% since July 2022. Eggs and bread are still more than 20% pricier than a year ago and the only item to have fallen over the period is coffee.
“Food prices at the supermarket are still going up at an alarming rate, which is really hitting shoppers in the pocket,” said Sue Davies, head of food policy at consumer magazine Which. “Even essentials that have seen price cuts in recent months like milk, butter and cheese are around a third more now than they were two years ago.”
This story was produced with the assistance of Bloomberg Automation.
--With assistance from Leonid Bershidsky.
