Written question WQ89077

The Competition and Marketing Authority (CMA) report, published in July 2023, found retailer competition was functioning as anticipated and food price inflation has been driven primarily by significant changes to input costs (energy, labour and cost of goods) rather than weak competition or corporate profiteering.

The CMA reported not all cost increases incurred by the retailers have been passed through to consumers. Operating profits across 11 national retailers have fallen in aggregate by 41.5% in the most recent financial year (2022 to 2023). The lowest-price retailers have gained market share and retailers whose prices have become higher than the market average have lost market share. The CMA is undertaking a follow-on study to focus on 10 specific categories of products and this will include milk and bread prices.

The Welsh Government monitors food price inflation and meets regularly with its counterparts in the UK Government and Devolved Administrations via the Market Monitoring Group that has been set up to monitor prices. The latest forecasts (Institute of Grocery Distribution) indicate food price inflation has peaked and will decline slowly over the rest of 2023. The current ONS inflation rate reported for food and non-alcoholic beverages is 13.6% (August 2023). The future food inflation outlook for December 2023 is predicted to be between 8% and 10%.