Revealed: how weekly grocery bills have soared in four years
Basic groceries have rocketed in cost by almost one-fifth for Northern Ireland householders in just four years.
New research has found that a typical basket of food items has increased by, on average, 18% in well-known supermarkets across the province.
The stark revelation follows an unexpected upwards blip in inflation this month — against Bank of England predictions that it was coming down — which is partly due to a world shortage in grain.
It also comes amid growing fears that food prices might spike further still after the World Bank said there had been a surge in key product prices recently as a result of adverse weather conditions in America.
The Belfast Telegraph investigated how much the price of a basket of goods has risen since 2008 using data collated at that time by research agency Millward Brown compared with today.
For the purposes of the study, the cost of 12 everyday items likely to be found in a family’s shopping basket were assessed, including a loaf of bread, two litres of milk, bananas, butter, potatoes and tea bags.
The cost of coffee, sugar, sausages, fizzy orange, baked beans and Weetabix cereal was also spot-checked in six different outlets — Tesco, Sainsbury's, Asda, Lidl, Dunnes Stores and Marks and Spencer.
Chief among the study’s findings is that although the average cost of a total basket of goods has increased by 18% in four years, the difference between the most and least expensive basket has actually decreased slightly, from £3.30 to £3.01.
The fact that the price differential across all six food retailers is so slight represents the fierce price war that currently exists among big supermarkets as they fight for clients.
The cost of a basket of goods rose more in cut-price discounter Lidl than in any other supermarket surveyed, rising from £15.02 to £19.33.
Meanwhile, the price of the same items at M&S increased by the least amount, going up from £17.67 in 2008 to £18.01.
A warning was issued by the World Bank earlier this month about rising food prices, with some analysts predicting a rerun of the dismal days of 2008.
The current problem stems from America — the world's biggest producer of corn — where a drought in the mid-west has spread across the country, prompting a huge increase in the price of the commodity.
Wheat prices have jumped more than 50%, corn has risen by over 45% and soybean has gone up by 30%.
Concerns over food prices are rife as unemployment continues to grow against a backdrop of falling incomes and higher household costs.
Economist John Simpson said an average household in Northern Ireland would need to spend an extra £3,500 extra just to pay the bills compared to four years ago because of hikes in the cost of living.
The average disposable income that a local family had to spend on staples — including food, fuel, utility commitments and mortgage/rent costs — amounted to £23,838* a year in 2008, according to data from the UK government's official social survey.
However, since the credit crunch really started to bite in mid-2008, Mr Simpson has calculated that families would now need an average disposable income of just under £27,500 to maintain the same standard of living.
He said that on top of an 18% increase in food costs, utility bills are also up by £800 in four years, and petrol and diesel prices have risen by £760 over the same period of time, while inflation has averaged around 4.2%.
“The average household has probably needed to spend around £3,500 more than they did in 2008 to cope with inflation on a total spend of just under £24,000 a year,” said Mr Simpson.
“That means the cost of living has for the normal man and woman gone up by 18% in real terms for some key items since the recession really began to impact on household budgets.
“The threat of higher cereal prices and the way it will impact on the cost of living is bad news because the Bank of England has been forecasting that by the end of 2012 inflation will be down to less than 2%.
“The prospect is that we will not make that 2% target and that prices may rise by nearer 3% per annum.”
Mr Simpson said the above calculations assess how the average Northern Ireland family has been affected by changes in the cost of living in the last four years and the prospective changes in the next 12 months.
* Source: Office of National Statistics (ONS), based on 720,000 households in Northern Ireland. (Prices correct as of August 15 & 16, 2012)