Shopping around key to a smaller food bill

September 8, 2009

Shoppers face a complex and time-consuming task to get the best deal, depending on the store they buy food from and the item involved according to a new booklet "Public behavior in the UK in times of economic decline/rising food prices." Published by the Economic and Social Research Council it highlights that the reports of a "food price crisis" fail to notice large cost variations over time and by outlet.

The booklet is based largely on insights from two academic experts on pricing - Dr. Steven Cummins, of Queen Mary, University of London, and Professor Derek Oddy, Emeritus Professor of Economic and Social History at the University of Westminster - for a public policy seminar organised by the ESRC for the Food Standards Agency.

Dr Cummins draws on his research with Professor Sally MacIntyre, of the Medical Research Council, Social and Public Health Sciences Unit, Glasgow, and Dr Dianna M Smith, of Queen Mary, University of London. This included checking the prices of more than 50 standard food items in 250 stores in 1997, and 500 in 2007, ranging from multiples and discounters to greengrocers and delicatessens.

The researchers found that large real increases for some items over the 10 years were balanced by big falls for others, but with large variations between types of outlet and locations. Dr Cummins warns: "Failing to choose the right store could mean - in an extreme case - a price premium as high as 260 per cent for a tin of baked beans from a delicatessen (72p) compared with a discount store (20p)."

He points out: "Changes in prices for some healthy items, such as fruit and vegetables, outstrip both general and food inflation. For example, peas, carrots, onions and tomatoes are becoming increasingly expensive in real terms, so consumption of these items may fall for those customers who tend to be price sensitive." That said "some items we are urged to eat more of are getting cheaper in real terms, such as apples and bananas."

Providing an historical perspective, Professor Oddy explains that over the 20th century, the costs of raw food materials fell until the 1970s, and consumers spent proportionately less of their income on food to create meals at home.

But he points out that the 1970s saw price increases which make today's prices appear modest by comparison. Factors including decimalisation of the pound, adoption of the Common Agricultural Policy, with tariffs against cheap food from outside the EEC, along with soaring oil prices due to Middle East wars and the Iranian Revolution, had a marked effect.

By 1974, the index of retail food prices rose almost 55 per cent over a matter of four years, as Britain passed from a 'cheap' to a 'dear' food economy.

He continues: "Since the 1970s, as food technology and food processing have increased, the price of raw food material has become less significant, as more and more people have begun to buy processed materials and ready-prepared meals.

"The quality and price of these products are determined by food manufacturers and large retailers, and their emphasis is on appearance, packaging and flavour rather than nutrition."

Professor Oddy says: "The decline of domestic cookery skills is a significant factor in this trend, though the storage of food, preparation of it, and the costs of cooking it may well exceed heating frozen packet meals - while demographic factors, such as the shrinking size of the household, have reinforced the uneconomic nature of some domestic food preparation for only one or two people."

Food consumption outside the home has also increasingly destabilised domestic eating arrangements, he adds.

Source: Economic & Social Research Council (news : web)

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