Food Costs Rising Thanks To Weak Pound
Posted by Allison on 20 April 2009, 11:20
Have you noticed your food shopping is costing a bit more lately? You shouldn’t be too surprised if it has, because it has been caused by the dreadful performance of the British pound against the other major currencies in the world.
The last four months haven’t been good for food shoppers – which is pretty much all of us, let’s face it. Many people have been so alarmed at the rising costs attached to their usual shopping basket that they have switched supermarkets and gone to a cheaper one instead. By doing so they hope to save money and keep their food bills down.
But the worst news of all is that the pound isn’t looking likely to improve any time soon. It could be that we are in for another round of price rises each month for the foreseeable future.
Plenty of websites and newspapers have been reporting on this latest turn of events during the recession. The Telegraph website published a story on the 9th April which revealed the extent to which families are struggling to keep their daily costs down. You can read the story here.
So why is the cost of food rising?
Put simply, it is because the companies that sell the food to us are paying more to get hold of it. Every business is struggling to keep costs down, but when they cannot do so they are faced with the choice of going under or pushing up prices to stay afloat. Some people tend to think they put prices up to gain a larger profit. But in these current troubling times, when the figures on their currency converter are not as good as they would like, they are not making any more money than they would be normally.
The pound has got progressively weaker over the past year or so, and it shows no signs at the moment of improving in any way. Take a look at how the pound has performed against the US dollar since 2008 for example. At its highest point it managed to get up to 2.0340; that was way back on the 13th March last year. And the 22nd July was the last time it was over the two dollar mark – at 2.0060. From that point onwards it has nosedived all the way. The lowest point so far was on the 23rd January, when it plumbed the depths at 1.3630.
But even now it isn’t out of the woods. It took several months to get down to this level, so we aren’t going to see it climb back up to the two dollar rate again for a while either.
So it seems as if the larger expense of food is also going to be with us for a while. People are becoming savvier and buying in bulk or buying offers to cut down on the bills though. We are becoming a nation that has gone back to being more practical and trying to save money on food by buying less pre-packed items where we can.
In a sense we may even see that something good comes out of this recession. We will learn to change our food buying habits and try and find a better way to cope with the increased prices the pound has foisted on us until things get better again.