The Great Inflation Heist: Why Your Everyday Essentials Are Worth More Than Ever

The recent price hike of everyday essentials has left many feeling short-changed. The average box of six supermarket own-brand free-range eggs now costs £1.80 – an 80p increase since 2022, according to market researchers Assosia.

Eggs are just one symptom of a larger problem: rising costs for raw materials, energy, and labor have pushed up prices across the board. Ukraine’s invasion in 2022 sent grain prices soaring, while the conflict in the Middle East has sparked global supply fears. The pandemic’s ongoing effects on global supply chains have compounded these pressures.

Producers are struggling to keep costs under control due to high expenses for ingredients like grain and transportation. Dairy production relies heavily on energy-intensive processes such as milking, processing, and transportation, contributing to rising milk prices – 36p since 2022.

While supermarkets point out that their profit margins haven’t increased over the past 20 years, experts caution against making too much of this. “It can be galling,” says AJ Bell head of financial analysis Danni Hewson, “but supermarkets are not exactly swimming in profits.” Most operate on razor-thin margins, selling staple products at a loss to keep customers coming back.

The Myth of Supermarket Profiteering

Accusations of supermarket profiteering have been leveled against Tesco and Sainsbury’s. However, Andrew Opie, director of food and sustainability at the British Retail Consortium, suggests that supermarkets are doing their best to absorb losses on staple products. “They’re offering value on everyday staples,” he says – in some cases selling products below cost just to keep customers happy.

Hewson agrees: “These are not businesses that are making huge amounts for every pound they sell.” The latest data from the Competition and Markets Authority shows that none of the main retailers’ profit margins have increased over the last 20 years. Sales at the UK’s main supermarkets did rise between 2020 and 2024 – largely due to inflation.

The Bigger Picture

The price hike highlights deep-seated problems in our food supply chains. Rising costs for raw materials and energy are having a knock-on effect throughout the industry, from farmers to retailers. As we navigate this perfect storm of inflationary pressures, it’s clear that we need to examine how our food system works.

Reforming agricultural subsidies or investing in renewable energy sources could make our food more sustainable and affordable. With prices continuing to rise, consumers may turn to cheaper alternatives like Aldi and Lidl, which offer lower prices on staple products. Supermarkets might be forced to swallow their losses once again, sacrificing profit margins for customer loyalty.

One thing is certain: the great inflation heist is far from over. As we continue to shell out more for our everyday essentials, it’s up to us – as consumers and citizens – to demand change. We need a food system that works for everyone, not just the big players. It’s time to take back control of our shopping baskets and fight for a fairer future.