The British Retail Consortium (BRC) has warned that Christmas dinners “may look different this year” due to food inflation, declining footfall and the cost-of-living crisis.
The trade association for retail businesses released food inflation and footfall statistics and predicted that the cost-of-living crisis will cause some families to change some of their Christmas plans, particularly in relation to Christmas dinner.
Speaking to Agriland, a spokesperson for the organisation, Tom Holden, said: “I think some Christmas dinners may look different this year because of the cost-of-living crisis, which means that some people are having to perhaps scale back some of their plans.
“While many people will be trying to make sure they get their turkey dinners, there may be some households that simply can’t afford the sort of ‘all-the-trimmings’ approach that they might have been able to in previous years.”
Holden said that food inflation is playing a huge role in this cost struggle, but cited squeezes on incomes from other sources, particularly as a result of the war in Ukraine, as other reasons.
“I think the war in Ukraine and the rising costs at the moment would suggest that food prices may remain high for a while owing to higher energy prices, higher animals feed prices and higher fertiliser prices all of which come out of either Ukraine, Russia or both.”
Christmas buying trends
Holden explained that he believes consumers will unwillingly spend more this year because of food inflation.
“I think that the amount people spend in raw pounds is going to increase because inflation has forced that,” he said.
“The big difference might be that some families might be going for supermarket own-brand products rather than the sort of premium-line products that they might have got in previous years.
“Overall food inflation was at 12.4% in November and fresh food inflation was at 14.3%. That’s the reality of inflation at the moment is people will be spending more but they’ll be getting less to an extent.
“That is why what we’ve seen broadly across spending patterns in retail in the previous few months is while sales by value have risen, sales by volume have fallen.”
Holden offered hope that prices may begin to fall in the new year, but added that this would probably not happen soon enough to impact Christmas.
“There is some hope in the fact that global food commodity prices have been falling. They’re still higher than they were last year but they’ve definitely fallen from their March peak.
“However, those prices tend to have a lag in feeding through to prices on the shop floor, so it may take a little bit of time. But, hopefully we’ll start to see inflation start to ease, but probably not in time for Christmas.
“I think supermarkets are incredibly keen to not see prices increase any further before Christmas to protect consumers. Although that obviously poses a challenge for farmers at times.”
Farming production costs and bird flu
Holden highlighted the issues the farming sector is facing as a result of rising energy and production costs, adding that the main retailing issue is trying to find a price that can allow farmers to continue in a sustainable manner but that can also be affordable for consumers.
Regarding the ongoing avian influenza (bird flu) outbreak in the UK, Holden said that recent figures from the British Poultry Council (BPC) are cause for concern.
The council recently reported that half of free-range Christmas turkeys have been impacted by bird flu.
“A lot of turkey farmers across the board have killed turkeys early in order to freeze them,” Holden said.
“The Department for Environment, Food and Rural Affairs (Defra) has given special permission for them to freeze the birds now then thaw them just before Christmas to allow people to buy them ‘as fresh’ so to speak, and if they were frozen means they can’t actually be re-frozen.
“It seems a bit weird to be sold as de-frosted but the reality is that is the same as most ready-meals.”
Footfall
Recent figures from the BRC highlighted a decrease in footfall across both retail parks and shopping centres. Footfall statistics help discern the number of people entering a shop at a given time.
The total UK footfall decreased by 13.3% in November.
High streets footfall declined by 13.6%; retail parks saw a 4.2% decrease and shopping centres saw a 23,2% decrease, the worst cross the board.
Chief executive of the BRC, Helen Dickinson, said: “Rising inflation and low consumer confidence continue to dampen spending expectations in the run up to Christmas.
“Despite retailers doing their best to keep prices as low as possible for their customers, financial concerns are trumping spending for many households.”
