How indies can fight the ‘expensive’ perception as food inflation rises

22 June 2022, 08:06 AM
  • With food inflation set to reach 15% in the next couple of months, we explore how independent food retailers such as farm shops can offer better value for consumers
How indies can fight the ‘expensive’ perception as food inflation rises

Indie food retailers hold a perception by many of being more expensive than supermarkets, something which would turn shoppers away during a cost-of-living crisis. But with prices higher than ever before, how can farm shops, food halls and delis offer better value for consumers?

According to a new report from the Institute of Grocery Distribution (IGD), the rise in the cost of essential food items is likely to reach a peak of up to 15% this summer, the highest figure in 20 years, and will last much longer than initially predicted.

This is due to several factors, including the impact of the war in Ukraine, pre-existing supply chain challenges, and limited effectiveness of monetary and fiscal policy.

As James Walton, chief economist at IGD, explained, “From our research, we’re unlikely to see the cost-of-living pressures easing anytime soon. This will undoubtedly leave many households – and the businesses serving them – looking to the future with considerable anxiety. If average food bills go up 10.9% in a year, a family of four would need to find approximately £516 extra per year. We are already seeing households skipping meals – a clear indicator of food stress.

“We expect the mood of shoppers to remain bleak for the foreseeable future as they are impacted by rising inflation and a decline in real wages. Shoppers are likely to dial-up money-saving tactics as far as possible.”

The strongest inflation pressure is expected to come from meat, cereal products, dairy, fruit and vegetables. In particular, products that rely on wheat for feed, such as white meats, are likely to see prices soar in the short term as a result of the war in the ‘bread basket of Europe’.

Agile supply chains and buying less
In order to break the stigma of being too expensive, independents should be shouting about their agile supply chains and the ability to buy exactly what you need, limiting food waste for their customers.

As Rupert Evans, Farm Retail Association chairman and owner of Denstone Hall, explained, “Local food with short supply chains is often cheaper than what is available in supermarkets. Farm shops also make buying in small quantities easier. For instance, buying a few sausages from a butcher rather than a whole packet can reduce cost and food waste.”

This is something Robert Copley, co-owner of Farmer Copley’s, agreed with. “Cost acceleration and wage acceleration are inevitable in these unprecedented times, even on a farm shop level”, he explained. 

“However, due to much shorter supply chains with local and home production, farm shops are much less affected by distribution costs than supermarkets. Locally produced foods have a better chance of being better value for the consumer, especially when coupled with seasonality.”

Fidelity Weston, honorary vice president of Pasture for Life, added that “Having access to fruit and vegetables that may not be fit for the supermarket standard could offer good deals, making the most of local gluts all help.” 

Food miles and fuel costs
While supermarket produce can travel up to hundreds of miles to reach the shelves, indies such as farm shops will source the majority of their fresh produce from the local area which cuts down fuel costs.

As Fidelity explained, “Given the food price increases are centred around increased fuel and animal feed costs many, farm shops can sell produce that is locally produced and choose to stock products that do not require additional feed and fertiliser costs. They are not tied into long supply chains so can be nimble and responsive.

“This means that bought locally, [meat] will have very few food miles and being raised on pasture only means there is little impact on production costs as the pasture is there anyway.

“Direct conversations between shoppers and sellers can help the producer talk through the options and point out how cooking particular cuts, reducing the quantity of meat used versus vegetables etc., and all help to bring down overall expenditure. You never get this attention to detail from the supermarket operating longer supply chains.”

But it’s not just the food itself that can make indies more economical. Mark Kacary, managing director of Norfolk Deli, suggested that rising fuel costs for consumers are making local indies a cheaper option, despite potential savings at the multiples. 

He told Speciality Food, “I was speaking to a customer this morning about how some people look at the price of something in an independent, feel that they could make a 50p saving by getting in their car and driving elsewhere without a thought for the cost of the fuel, wear and tear, not to mention the additional time it takes to make a tiny saving.”

In this way, assessing the affordability of indies is more about looking at the whole picture rather than just the labelled price of a particular food item.

Robert concluded, “Farm shops are convenient and local as are supermarkets and home delivery, so it’s more of a cost-saving through distribution savings, seasonality, and previewed value. The experience of visiting farm shops can be seen as a ‘trip’ out, rather than a supermarket visit which is seen as a chore. 

“We have our work cut out for us but there are some exciting opportunities to be had!”

more like this
close stay up-to-date with our free newsletter | expert intel | tailored industry news | new-to-know trend analysis | sign up | speciality food daily briefing