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Cost of everyday supermarket items 'rises by 8%'

Published 02/09/2015

The average cost of everyday items has risen, according to new figures
The average cost of everyday items has risen, according to new figures

The cost of basic food and non-alcoholic drink in supermarkets may be rising a lot faster than previously thought.

A cross-section of everyday items, including tea bags, bananas, potatoes and milk, went up in price by an average of 8% over the past year, according to new figures piloted by the Office for National Statistics (ONS).

Other goods were found to have risen even faster in price, with a kilogram of cheddar cheese going up by 15% and a 500g packet of dry spaghetti or pasta by 19%.

The figures cover the period June 2014 to June 2015, and have been released as part of an ongoing project by the ONS to find new ways of monitoring the cost of items in the "basket of goods" - the list of products used to calculate inflation.

The new data has been compiled using a process called "web scraping".

A special computer programme scans the websites of Tesco, Sainsbury's and Waitrose every day at 5am, recording the prices for each of the 35 items in ONS inflation basket.

Around 6,500 prices are collected each day, which adds up to roughly 200,000 a month, a much larger number that that gathered by the traditional approach used for calculating the consumer price index (CPI) rate of inflation.

For example, while the CPI is based on 140 prices for a bottle of whisky on a specific day each month, the new method draws on over 6,000 quotes over the course of every calendar month.

The new figures suggest recent supermarket "price wars" may not have had a consistent impact across the country.

The ONS has linked falls in food and non-alcoholic drink prices to current low levels of inflation, including a CPI rate of just 0.1% in July.

It also points out that the new data should not be directly compared with the rate of inflation, however .

This is due to the way the figures have been compiled, in particular the variations between prices collected every day (what is known as a "chain index") and the average cost across a fixed period (the "unit price").

While the chain index for the 12 months to June suggests a rise in everyday food and non-alcoholic drink of 7.9%, the unit price suggests an increase of between 1.3% and 1.8% - a difference described by the ONS as "striking".

The cost of a small individual yoghurt rose by 13% according to the weekly chain index, but fell between 3% when measured by unit price.

And while the cost of one packet of 80 tea bags went down by 4% on the day-to-day measure, the unit price showed a rise of just under 3%.

The difference is due to the way the unit price is calculated, which discounts data for items when a price is not available in all periods of comparison - for example, if a supermarket website fails to display a price on a particular day.

This "significantly reduces the number of prices used in the calculation of the index," according to the ONS.

But the inconsistency between the different measurements could mean that shoppers across the country are seeing a greater variety of day-to-day prices rises and special offers than those reflected in monthly figures, including the official rate of inflation .

This would support the findings of a recent report by the Institute for Fiscal Studies (IFS) which called for more data sources to be used in the compilation of consumer price statistics, including those from supermarket websites.

Here are some examples from the ONS figures, showing the change in price of everyday items between June 2014 and June 2015, as measured by the weekly chain index compared with the unit price:

:: Semi-skimmed milk: up 2% (chain index), down 2% (unit price)

:: Red wine (European, 75cl): up 14% (chain index), down 4% (unit price)

:: Packet of plain biscuits, 200-300g: up 8% (chain index), down 1% (unit price)

:: Freshly chilled orange juice: up 9% (chain index), down 1% (unit price)

:: Dry spaghetti or pasta, 500g: up 19% (chain index), up 1% (unit price)

:: Cola-flavoured drink, 2l bottle: up 14% (chain index), no change (unit price)

:: Cheddar per kg: up 15% (chain index), down 7% (unit price)

:: Bananas, per kg: up 6% (chain index), down 18% (unit price)

:: New potatoes, per kg: up 7% (chain index), down 2% (unit price)

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