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Many shoppers have noticed that the cost of everyday groceries has climbed significantly over the past few years. Regular purchases such as milk, bread, and eggs now come with a heftier price tag, even when customers avoid adding luxury items like wine or biscuits to their baskets. This rising expense prompts the question: how much more are consumers paying today for these staple products compared to just a few years ago?
To illustrate this, consider eggs. In 2022, a typical box of six free-range supermarket-brand eggs was priced at £1. However, recent data from market researchers Assosia, who surveyed average prices at major retailers including Tesco, Sainsbury’s, Asda, and Morrisons, reveal that this same item now costs around £1.80. The significant jump is largely due to the UK’s severe avian flu outbreak between 2021 and 2023, which forced the culling of millions of hens. This reduction in laying hens, combined with the energy costs associated with housing birds indoors for biosecurity reasons, resulted in shortages. Consequently, supermarkets imposed purchase limits on eggs, while producers and retailers raised prices to compensate for their increased costs. The expenses of producing eggs are influenced heavily by grain prices—Ukraine, a key grain supplier, saw costs rise sharply after the Russian invasion in 2022, with energy prices also escalating due to conflicts in the Middle East. Despite these cost pressures, the demand for eggs remains strong, bolstered by the popularity of high-protein diets.
Milk, another essential item, has also experienced price increases. The cost of four pints of semi-skimmed milk rose from £1.29 in 2022 to £1.65 currently, based on Assosia’s figures for supermarket budget ranges. The dairy sector consumes vast amounts of energy in the milking, processing, and distribution phases, making it vulnerable to energy price hikes such as those driven by the war in Ukraine. While initial price surges occurred, global milk oversupply has recently softened increases, and dairy farmers are reportedly receiving 25% less per litre of milk, with many operating at a loss, according to agricultural analysts at The Andersons Centre. Meanwhile, the production costs for many fundamental goods, including eggs, milk, and bread, have surged well beyond inflation rates in the past year. According to the Office for National Statistics (ONS), the cost of materials and goods for producers increased by 7.7% in the year to April, the largest rise in over three years. Yet factory gate prices, or the amounts producers charge retailers and wholesalers, edged up by only 4%, highlighting financial pressures on producers. AJ Bell’s head of financial analysis, Danni Hewson, notes that contracts between producers and supermarkets are fixed in advance, preventing cost adjustments mid-term despite fluctuating expenses, thus requiring producers to absorb some of the increased costs.
Bread prices have seen more modest increases, with a basic medium slice white loaf rising from 65p in 2022 to an average of 74p today at the major supermarkets. Although Assosia does not track discount retailers like Aldi and Lidl, price competition among the larger chains tends to keep costs aligned. The wheat price increases tied to the Ukraine conflict have largely stabilized, but ongoing unrest in the Middle East has reignited concerns about global supply. Hewson describes a “perfect storm” of factors driving up essential goods prices, including raw material costs, energy and labor expenses, and changes in packaging regulations. Despite rising checkout totals, supermarkets have not seen their profit margins improve over the past two decades. While sales figures have grown from approximately £130 billion to £160 billion between 2020 and 2024, operating profits relative to total revenue have remained steady or declined, illustrating the intense competitiveness of the UK grocery market. The Competition and Markets Authority’s 2024 investigation into the grocery sector found no evidence of artificial price inflation by retailers amid recent food price surges linked to global energy crises. Hewson emphasizes the fierce competition within the industry, noting supermarkets frequently sell certain staple items at a loss to attract customer footfall, absorbing those losses within their margins. Andrew Opie, director of food and sustainability at the British Retail Consortium, highlights that the UK remains one of the most affordable countries in Western Europe for grocery shopping, and points out that supermarkets have intentionally focused on providing good value for everyday essentials by sometimes selling products below cost to benefit consumers
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