Restaurant sales hit as food prices forecast to keep rising this year
Shoppers are still finding prices for their favourite staples creeping up almost every week in come cases, and fresh data on Tuesday provides little evidence that significant relief can be expected any time soon.
Closely-watched figures from Numerator's Wordpanel show grocery inflation stood at 5 per cent over the four weeks to 10 August, compared to 5.2 per cent last month.
And, as a result of having to spend so much money in supermarkets, data shows visits to casual and fast-food restaurants are down.
Trade body the British Retail Consortium, which represents Britain's biggest retailers, predicts that food inflation will hit 6 per cent by the end of the year, putting more pressure on household budgets in the run up to Christmas.
The Bank of England, which targets consumer price inflation of 2 per cent, has forecast food price growth will rise to 5.5 per cent ahead of Christmas, before falling back.
Aside from showing that grocery inflation has edged down, today's report also revealed that one billion fish fingers were sold in the past year, ahead of the British staple turning 70 in September.
What's happened to food inflation?
Wordpanel said chocolate, fresh meat and coffee saw prices rise the fastest, while prices for champagne, sparkling wine, dog food and sugar confectionary are falling at the fastest pace.
Take-home sales at the grocers grew by 4 per cent over the four weeks, compared to the same period a year ago.
Sales of branded grocery items rose 6.1 per cent this month, putting them ahead of own-label alternatives, which were up by 4.1 per cent. This represented the biggest gap in favour of brands since March 2024, according to the research.
Branded item sales comprise 46.4 per cent of all grocery spending, with shoppers most likely to plump for branded personal care, confectionary, hot drinks and soft drinks, the report said.
It added: 'While a far smaller part of the market, premium own-label is also continuing to do well and sales rose by 11.5 per cent this period.'
Fraser McKevitt, head of retail and consumer insight at Worldpanel, said on Tuesday: 'We've seen a marginal drop in grocery price inflation this month, but we're still well past the point at which price rises really start to bite and consumers are continuing to adapt their behaviour to make ends meet.'
He added: 'What people pay for their supermarket shopping often impacts their spending across other parts of the high street too, including their eating and drinking habits out of the home.
'Casual and fast service restaurants especially have seen a decline in visitors over the summer, with trips falling by 6 per cent during the three months to mid-July 2025 – compared with last year. The outliers in this are coffee shops which have bucked the trend.'
Official data on Wednesday is expected to show accelerating inflation, which could in turn curb the pace of interest rate cuts.
Which supermarket came out on top?
Lidl and Ocado were tied for top spot as the fastest growing grocers over the 12 weeks to 10 August, with sales at both retailers up 10.7 per cent compared to the same period last year, Worldpanel said.
Lidl's share of the market increased by 0.5 percentage points to 8.3 per cent, while Ocado now holds 1.9 per cent, up from 1.8 per cent last year.
Online sales across all retailers jumped 6.7 per cent over the 12 week period.
Tesco enjoyed its largest monthly share gain since December 2024 as its hold of the market rose by 0.8 percentage points to 28.4 per cent. This was driven by sales growth of 7.4 per cent compared to last year.
Shopper spending at Sainsbury's grew 5.2 per cent on last year, taking its portion of the market to 15 per cent.
Sales at Aldi were 4.8 per cent higher, giving it a 10.8 per cent share of the market.
Asda and Morrisons' share of the market now stands at 11.8 per cent and 8.4 per cent respectively.
Spending at Waitrose grew 4.8 per cent over the 12 weeks, with its market share at 4.4 per cent.
With its sales rising by 3.4 per cent, Iceland's hold of the market remained at 2.3 per cent. Co-op has a 5.4 per cent share of take-home sales, the findings added.
Commenting on changing habits at home, Fraser McKevitt said: 'The average home cook now spends three minutes less preparing the evening meal than they did in 2017 at just under 31 minutes.
'We can see this trend in the growth of things like microwaveable rice, ready meals and chilled pizza too, which have grown by 8 per cent, 6 per cent and 5 per cent respectively.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Times
3 minutes ago
- Times
Inheritance tax raid would hurt young families, Reeves warned
Going after family gifts in an inheritance tax grab risks cutting struggling young families off from vital support, the chancellor has been told. The typical pensioner gives 10 per cent of their income — an average of almost £2,500 — away to family each year, about £1,320 directly and £1,175 towards education. The research from the wealth manager Quilter and the Centre for Economics and Business Research, a consultancy, shows the impact that a cap on tax-free gifts could have on younger generations. It comes amid reports that the measure is among those being considered by Rachel Reeves as she tries to plug a gap in the nation's finances. Rachael Griffin from Quilter said: 'There's a strong economic case for supporting the transfer of wealth between generations. Younger people face significant financial pressures, from high housing costs to childcare and limited pension savings, while older generations often hold substantial assets. Sensible rules help to unlock this capital at the right time.' The seven-year rule, which allows you to give away as many assets and as much cash as you want in your lifetime without it later being subject to inheritance tax, is said to be in the chancellor's sights. As long as you live for at least seven years after making a gift, it will not be taxed. Reeves is also said to be looking at a lifetime cap on the amount you can give away, although no details of how this would work have been released. Griffin said that instead of tightening the rules on gifting, the chancellor should actually make the system more generous, raising the £3,000 annual gifting exemption, which has not changed for more than 40 years, to a more realistic £9,000. You can give a total of £3,000 each year, to one person or divided among recipients, and as many gifts of £250 or less as you like, as long as you haven't already gifted to them from the £3,000. There are also allowances for wedding gifts. • Should there be a cap on inheritance tax-free gifts? Gary Smith from the wealth manager Evelyn Partners said: 'The patchwork of gifting rules is quite complicated and outdated, and there was some expectation before the last budget that there could be a crackdown on gifting under the auspices of simplification. 'The annual gifting limits, which allow smaller gifts that will never be subject to inheritance tax, are very modest, having been frozen for more than four decades, so they no longer afford much protection.' Quilter's research among more than 5,000 retired people, found that they had average outgoings of £22,140 a year — nearly £10,000 less than the income level that the industry body Pensions UK estimates is needed to provide a moderate standard of living in retirement. Some 18 per cent of those questioned said they were 'very concerned' about being able to maintain their standard of living, with anxiety highest among those under 65. • Ben Wilkinson: This tax policy chaos does not bode well The Centre for Economics and Business Research also found that the state pension made up half the income for those aged over 80. Median household income among the respondents was £35,000, but with sharp regional divides: in Wales, two-fifths had less than £30,000, while the London average was above £58,000. Steven Levin, Quilter's chief executive, said: 'These people aren't just budgeting for themselves; they're quietly propping up the next generation too. With nearly £2,500 a year being gifted to family and education, it's clear that many are playing a bigger economic role than they are often given credit for.'
Telegraph
6 minutes ago
- Telegraph
We may be facing the dotcom bubble 2.0
It was the sort of windfall Rachel Reeves, Britain's beleaguered Chancellor, would die for. Its bounty exceeded all expectations. The new century had only just been seen in and the atmosphere in financial markets was one of high excitement and riotous celebration. At Davos that January, the corridors were filled with the sound of what was then a relatively new phenomenon – a veritable cacophony of mobile phone ringtones. To be seen without the latest Nokia glued to one's ear was to be a backwards-looking outcast from modernity. Investors were making money as never before and there seemed to be no problem so great, no affliction so disabling, that the tech revolution of the day could not solve. It was a time of great promise, exaggerated expectations and hope for the future as globalisation and technological advancement swept all before them. But it also marked the exact zenith of the TMT (technology, media and telecoms) bubble. Before the year was out, more or less everyone who was at that meeting was nursing crippling losses. Few things better characterised the 'irrational exuberance' of the age than the auctions of 3G mobile phone licences that took place around that time. Cleverly structured using game theory to maximise proceeds for the presiding governments, they were almost guaranteed to end badly – none more so than in Britain where, in the scramble for spectrum, newcomers and incumbents alike ended up massively overpaying. It was great for the Treasury, which raised an astonishing £22.5bn from the five licences on offer. What Reeves, with an estimated hole of up to £50bn in the public finances to fill, would give for something similar. Yet it was close to catastrophic for the winners. British Telecom and the like were lucky to survive the following bust. The accompanying dotcom bubble also ended in tears, as all stock market manias invariably do. But this time is different, right? So the high priests of the latest mania – generative artificial intelligence and its progeny, superintelligence – would have you believe. Hundreds of billions of dollars are being poured into their pursuit. If the claims being made about the transformative powers of the new technologies sound familiar, that's because we have indeed heard it all before. Exactly the same was said of the internet. The predictions were not wrong in some respects. The resulting boom in communications infrastructure proved genuinely transformative. But the services it spawned also very rapidly became commoditised and the outright winners were confined to a relatively small number of very large corporations. Along the way, there were many casualties. This is the pattern for virtually all emerging technological revolutions. By way of example, take the birth of the automotive industry. At one stage there were more than 2,000 separate car manufacturers in the US, but only a relatively small number of them lasted the distance. You would have lost money on the vast majority of these ventures – and even if you had invested in all of them, the gains from the winners would not have compensated for the losses from those that fell by the wayside. But even among those with a deep understanding of the industries involved, successfully identifying the eventual winners from rapid industrial change is virtually impossible, so the tendency is to invest in the entire field in the hope that some come good. The result is a self-feeding bubble in which almost any Tom, Dick or Harry can ride the zeitgeist and attract capital. We saw it during the dotcom mania and we are seeing it again today. As an amusing aside, the stock market guru Warren Buffett once observed that it is much easier to spot the losers from any transformative technology than it is the winners. One obvious loser from the automotive revolution was the horse and cart. There were 20 million horses in the US at the beginning of the 20th century. Today, there are fewer than four million and very few of those are kept for pulling wagons. With AI, it is similarly possible to see which industries and professions are likely to be destroyed by it, with anything to do with conventional data analytics being only the most obvious. As for likely winners, it is admittedly a little bit different this time, in that the companies pouring the big bucks into AI are substantially the same as the winners from the preceding IT revolution – Microsoft, Meta, Alphabet, Apple, Amazon and so on. Even so, the potential for extreme misallocation of capital remains much the same. All these companies are driven by a winner-takes-all mentality. Few of them foresee a world in which they can all succeed. The result is a kind of arms race, or a game of poker in which the stakes are constantly raised. All the main players are dramatically ramping up their capital spending with plans for ever bigger, hyperscale data centres. Microsoft has earmarked $80bn (£59bn) for data centres to train AI models and Meta's year-to-date capital spending has already topped $30bn. Going all in, analysts expect Meta's Mark Zuckerberg to sink a further $100bn into the AI gold rush next financial year. Similarly, Alphabet in the first two quarters of its financial year recorded $40bn of capital spending. See you and raise you another $20bn, says Amazon, which spent nearly $60bn. So craven has the hunt for top AI talent become, OpenAI boss Sam Altman said recently that members of his team had been getting offers of more than $100m as 'signing bonuses' from Meta. Piggybacking on the new infrastructure are thousands of AI-related start-ups and Johnny-come-lately chancers, all jostling for a share of the action. The hype is off the scale – but there are already unnerving signs of things falling short of the lofty expectations invested in them. According to a recent survey by MIT's Networked Agents and Decentralised AI (Nanda) initiative, only about 5pc of AI pilot programmes applied at company level achieve meaningful results in terms of enhanced revenues and profits. Yet such findings have not yet deterred investors. Some two thirds of the shares in the S&P 500 trade at 30 times earnings or more, and one third at 50 or more. These are the sort of valuations we saw at the height of the dotcom bubble and they require positively heroic levels of future growth to bring them back down to trend. Other measures show a similar level of overvaluation. My thanks to Davide Serra, of Algebris Investments, for drawing my attention to the following shocker. The market capitalisation of the tech-heavy Nasdaq has rocketed during the bull market of the last 15 years to 145pc of the US's entire M2 money supply, which is even higher than it was just before the dotcom crash.
The Guardian
6 minutes ago
- The Guardian
Angela Rayner hit with legal challenge over datacentre on green belt land
The deputy prime minister, Angela Rayner, has been hit with a legal challenge after she overruled a local council to approve a hyperscale datacentre on green belt land by the M25 in Buckinghamshire. Campaigners bringing the action are complaining that no environmental impact assessment was made for the 90MW datacentre, which was approved as part of the Labour government's push to turn the UK into an AI powerhouse by trebling computing capacity to meet rising demand amid what it terms 'a global race' as AI usage takes off. The home counties datacentre is relatively small compared with one planned in north Lincolnshire that will have about 10 times the capacity, and is dwarfed by one planned by Meta's Mark Zuckerberg in Louisiana, which will be more than 50 times larger as he seeks to achieve digital 'superintelligence'. But Foxglove, the tech equity campaign group bringing the legal challenge alongside the environmental charity Global Action Plan, said the energy demand could push up local electricity prices and said it was 'baffling' that the government had not carried out an environmental assessment. Oliver Hayes, the head of campaigns at Global Action Plan, said Rayner's 'lack of meaningful scrutiny' was a worrying signal as more datacentres were planned around the UK. 'Are the societal benefits of chatbots and deepfakes really worth sacrificing progress towards a safe climate and dependable water supply?' he said. 'The government must reconsider its rash decision or risk an embarrassing reality check in court.' Last June, Buckinghamshire council refused planning permission for the facility in Iver on what was once a landfill site, saying it 'would constitute inappropriate development in the green belt' and would harm the appearance of the area, air quality and habitats of protected species. Local objectors said the two buildings rising to 18 metres would 'dwarf the area' and would be an 'eyesore' for ramblers, and that there were more appropriate brownfield sites. Other locals complained datacentres were intrusive and noisy and provided few jobs, although the applicant, Greystoke, claims it will create about 230 jobs and support hundreds more in the wider economy. Following an appeal against the refusal, a public inquiry favoured consent, concluding that no environmental impact assessment was needed. Sign up to Down to Earth The planet's most important stories. Get all the week's environment news - the good, the bad and the essential after newsletter promotion In March, the technology secretary, Peter Kyle, attacked the 'archaic planning processes' holding up the construction of technology infrastructure and complained that 'the datacentres we need to power our digital economy get blocked because they ruin the view from the M25'. Rayner granted planning permission last month in what was seen as an example of the government's pro-development 'grey belt' strategy to build on green belt land viewed as of lower environmental value. But Rosa Curling, co-executive director of Foxglove, said that thanks to Rayner's decision, 'local people and businesses in Buckinghamshire will soon be competing with the power-guzzling behemoth to keep the lights on – which, as we've seen in the [United] States, usually means sky-high prices'. The energy industry has estimated the rapid adoption of AI could mean datacentres will account for a 10th of electricity demand in Great Britain by 2050, five to 10 times more than today. And while the Iver datacentre is proposed to be air-cooled, many use vast quantities of water. In March, Thames Water warned that its region was 'seriously water-stressed … and yet there could be as many as 70 new datacentres in our area over the next few years, with each one potentially using upwards of 1,000 litres of water per second, or the equivalent of 24,000 homes' usage'. A spokesperson for Greystoke said Rayner had reached the right decision and recognised that the datacentre 'meets a vital national need for digital infrastructure, and will bring over £1bn of investment, transforming a former landfill site next to the M25'. 'Modern datacentres play a key role in advancing scientific research, medical diagnostics and sustainable energy,' they said. 'The datacentre campus incorporates measures which benefit the environment, including appropriate building standards, solar panels and heat pumps.' The Ministry of Housing, Communities and Local Government declined to comment on threats of legal action.
