Original subtitles

Tonight on Panorama, we investigate the rising cost of food.

Before we'd just go to a supermarket and just put things

in a trolley and think, "Oh, we'll make this

"or we might make that."

Can't do that any more.

We've tried going for a cheaper option, the kids definitely notice

the difference between Heinz ketchup and Essentials ketchup.

And how where you shop can really impact what you pay.

If you were to buy this exact shop every week for a year,

it would cost over £300 more than the shop from

the big supermarket.

Rising prices are also forcing schools to make tough choices.

I wouldn't be surprised if we were around £60,000 short

at the end of this financial year in March.

£60,000.

One and a half teachers.

And with food prices continuing to rise, what's

the long-term cost for Britain?

Malnutrition is a huge concern right now.

It's becoming the norm that people aren't eating.

Ancl that's shocking to be saying that.

Food inflation in Britain has skyrocketed - increasing

at its fastest rate in 42 years.

Yep, let's go.

The average annual grocery bill for households is now forecast

to rise by £682 this year.

Hi!

Come on in.

Alan and Becky live in Sussex.

They run their own business, which earns them above the UK

average household income in Britain.

But recently they've seen the cost of feeding their family

of seven rise sharply.

In any given week what do you think you might spend on food?

Now I'd say £170, which has gone up a lot from I'd

say, what, £110 maybe?

Yeah.

The cost of food going up now is concerning because it feels

like it's never-ending.

So have you changed how you shop lately?

With things like the pastas, we'll bulk buy the pasta and we've

been doing a lot of pasta bakes and pasta dishes that are going

to fill everyone up for cheaper.

So sticking with more kind of cheaper carbohydrate.

Yeah.

Butter has gone up a lot, that's something we've bulk bought.

Ancl cheese because the price has just gone up massively.

So this is the sort of quantity of cheese you buy?

Yeah, family-size cheese.

It's much cheaper to buy it in bulk like that.

But they've also been cutting back where they can.

This one is a 500g mince, whereas, usually I would buy 750g, but now,

obviously, the price has gone up so much, I have learnt to stretch

that further by bulking it up with things like carrots or even

potatoes cut up really small.

It just make it go further really.

Savings are needed more than ever.

As a journalist I've been covering stories about food for 15 years,

and I've never seen annual rises like this.

From our morning cup of tea to beans on toast.

Every time we put oil in a pan...

...chop an onion...

...or serve up some pasta...

...we're seeing the pennies add up.

So why have prices gone through the roof?

Over the last three years, a series of shock waves have

put immense pressure on our food supply chain.

Let's take the humble potato, a staple of many

of our favourite meals.

Now the price of a two and a half kilo bag of spuds has

gone up 10p since April.

And there are a number of reasons behind that.

First, you've got to grow the potato.

That involves fertiliser, which has gone up in price this

year by more than 30%.

And then the potatoes need to be harvested.

The machinery that does this needs fuel, which has risen in the past 12

months by more than 45%.

And you've got to pay the workers.

Labour costs have gone up at least 6% in the last year due

to an increase in minimum wage and, according to farmers,

there's still a shortage of workers since Brexit.

On top of that, UK potato harvests have been hit by drought.

And since the pandemic, packaging and transport

costs have also risen.

Altogether adding up to that extra 10p on a bag of spuds.

It's a dizzying list of global factors all of which have a knock-on

effect on the price of food.

But what about closer to home, in the shops where we buy

the majority of what we eat?

Which brings us onto the supermarkets.

Almost 80% of people in Britain shop at a supermarket

at least once a week.

We've grown used to a wide range of food all year

round at competitive prices.

Last year, the UK's three biggest supermarkets -

Tesco, Sainsburys and Asda - made profits totaling £3 billion.

So how will they fare during this cost-of-living crisis?

How challenged are the supermarkets right now?

Supermarket power has grown.

Supermarket power has grown.

They are the power brokers, the baronial class of

the modern food system.

The problem is now they're in a situation where they're

being hit by events and trends that they can't control.

Ancl they're trying very hard to keep prices down while maintaining

their market share.

You could've saved money on that lot with the Sainsbury's smart

shop app, you silly...

Sausage!

Supermarkets say they're trying to help us through

the cost-of living crisis.

Their glossy adverts trying to keep us coming through their doors.

We're on your side and staying there.

Seasons change, but these prices won't.

And right now they need our business more than ever.

But as our budgets get squeezed, the changing way we shop

is having an impact.

I think what we're seeing is that people are buying fewer brands.

They're also buying fewer items.

This is bad news for the supermarkets.

To make a profit, you need people to buy the brands, the luxury items,

the treats and we're not buying as many.

I'm heading back to see Becky and Alan.

They're having to think more about the products they spend

their hard-earned money on.

Do you guys mind if I have a quick little look in your cupboards?

Yeah, of course, go ahead.

Yeah, no worries.

Branded products tend to be more expensive than cheaper

own-brand alternatives.

To save money, Alan and Becky have tried to reduce the number

of branded items they buy, but it isn't easy.

So you've got a few brands, haven't you?

Yeah, we've tried going for a cheaper option.

Yeah, exactly.

Ketchup is one of them, but the kids definitely notice

the difference between Heinz ketchup and like Essentials ketchup.

We've tried probably, I would say, four or five different supermarkets.

Really?

Yeah, we've tried Aldi, Ascla, Sainsbury's, the Tesco one,

Lidl's, even Iceland, we've tried all of them.

Ancl I've even put the ketchup in the Heinz bottle,

but they just know.

Wow, that is a mum on a mission to substitute the ketchup!

Consumer campaign group Which?

Has exclusively shared with Panorama its latest

data on the cost of some of Britain's favourite brands.

For example, over the last two years, Weetabix has gone up by 16%,

that's imp per box.

Potato products like McCain oven chips and Birds Eye potato waffles

have gone up by a third.

Whilst Dolmio Bolognese sauce has gone up by almost 50%.

If you have these nine items in your trolley,

your shopping bill would be over £4 higher now compared

with two years ago.

The supermarkets say they're doing all they can to keep these

increases as low as possible.

I don't think it's an easy decision for the supermarkets

I don't think it's an easy decision for the supermarkets

to increase costs to customers.

There's only so many consumers in the UK,

there's only so many buyers, therefore they've got

to compete with each other to keep that level up,

to keep the number of consumers coming to them.

Latest figures show that sales of supermarket own-label

products are a third higher than they were a year ago.

And it's good news for Britain's discount chains.

In a search for cheaper alternatives to household name brands, we've

embraced a new kind of supermarket.

In September, Lidl recorded its strongest sales since 2014.

This year Aldi officially became Britain's fourth

largest supermarket, knocking Morrisons off its perch.

So what's the secret of their success?

The discounters are able to keep their prices low

because they have a slightly different model to

the other supermarkets.

They have less choice.

They have fewer stores and they have less floor space,

so they're avoiding all those costs.

That's why it's difficult for the supermarkets to price match

with the discounters.

But they have tried.

Tesco are by far the biggest supermarket, with more

than a quarter of the market share.

Four years ago, they decided to play the discounters at their own game.

They launched the jack's chain, named after their

founder jack Cohen.

It's Tesco but not as you know it.

This chain is called Jack's.

13 Jack's shops were opened, operating on a "low-cost business

model" that promised the "lowest possible prices", all of them

located in some of the most deprived neighborhoods in England.

But the experiment didn't work out for them.

Earlier this year, Tesco scrapped its Jack's chain altogether,

turning some into regular Tesco stores, but closing

seven completely.

Like this one on County Road in Liverpool.

This former jack's store in Walton sits in the most

deprived constituency in the whole of England.

Robby works for a community group, helping local

people who are struggling with their food bills.

They collect donations and surplus from the food industry and bring it

to locations around Merseyside.

They help feed around 7,000 people a month.

All hands on deck over here.

All hands on deck over here.

When the local jack's store closed in Walton,

Robbie's team started to bring their pop-up

pantry to the area.

It's become the busiest place they serve.

Most of the customers have actually said to us,

"We used to go to Jack's, because it was discounted

"food or cheaper foods."

So, I think a lot of the people that used to go there, come here now.

From your chats with people here, how bad are things right now?

I've never seen it this bad in my lifetime.

Mince or chicken?

Chicken?

Enjoy.

I would say about 60% of people that come here are in work poverty.

So the wages aren't enough to keep them warm at home

and feed them as well.

We've had postmen here.

We've had firemen here.

We've had nurses.

Ancl we have loads of pensioners.

People depend on us now.

When we started this about 18 months ago,

the outdoor mobile pantry, we were feeding about

500 people a month.

Ancl now, now we're feeding 7,000 a month.

We can't cope with it and other organisations can't cope with it,

so it's catastrophic.

The pantry runs on a membership scheme, where anyone locally can pay

£3.50 to choose around £25 worth of food.

There's no shame in not having enough money to live on, you know.

It's not your fault.

If people are hungry, they just come here and we'll feed them.

We just try and make it a little bit of an event for people.

So the half hour they spend here, if you forget

about the woes, it helps.

Ancl I've had people come up to us and go, "Feels

like a clay out to us."

That's why you hear us just laughing and joking with everyone,

just to try and create the right atmosphere.

Tesco says following the closure of jack's in Walton,

customers are now served by a superstore and three

smaller stores in the area.

It says across the UK it's donated more than 20 million meals

to community groups and food banks.

Back on the high street, the way we buy food is changing

and some of the biggest retailers are turning their attention

to smaller shops.

Convenience shop sales are forecast to grow by more than 13% over

the next five years.

To get in on the action, Asda are introducing an express shop

format for the first time, with 30 new stores opening

over the next year.

The main reason the supermarkets have moved more into convenience

type shops is because shopping habits have changed.

If you go into a supermarket, how many people are now

going in and buying a large shop?

Most people go in and buy a few items and go out,

they're treating the big stores like convenience stores.

So in some ways, the supermarkets are responding to a trend.

Tesco say 70% of their customers at their medium-sized Tesco Metro

stores are just buying food for that day.

So, in a move they say will serve their customers better,

plans are under way to close 89 Metro stores across the UK

and replace them with smaller Tesco Express shops.

This Tesco in Cirencester is due to shut up shop completely,

with a smaller Tesco Express opening nearby in this former clothes shop.

Retired teacher Bleddwyn lives in the centre of town

and is a regular customer.

If this big Tesco's closes, how will that affect you?

Enormously.

It will make my practical life very difficult.

I'm waiting for a knee operation,

which makes me immobile to a certain extent.

Ancl I can't walk as far as the other supermarkets.

There are a lot of disabled people like myself who live nearby and we,

we rely on that big Tesco's for all our shopping and we also

rely on it for our social life to a certain extent.

Tesco's plans could also affect Bleddwyn financially.

Prices are typically higher in smaller supermarkets.

So if you're somewhere where you've only got access to those stores,

maybe in a city centre, particularly if you don't have a car

or access to public transport, that would let you get to bigger

supermarkets where prices tend to be lower.

That can really add up over time.

Bleddwyn has a teacher's pension and gets the state pension too.

She budgets to spend £25 a week on food.

Things were already tight before prices started to rise.

I do record everything I spend and I am quite shocked at how much

more I'm having to spend for what I would call

the essentials of life.

My food, cleaning products, I mean, I don't buy anything that

I consider extravagant, but that takes away some

of the emotional pleasure of life.

I decided to find out what Tesco's plans could mean

for Bleddwyn's shopping bills.

I visited the soon to be closing Tesco where Bleddwyn shops now

and a Tesco Express store at the other side of town.

I bought the same list of fifteen typical items that many of us

buy on a weekly basis.

Most products were identical in both shops.

Except the instant coffee.

The jar was 20p more in the Express despite being 100 grams smaller.

And the pizza which had slightly different branding.

It was over £2 more in the Express, despite being 50 grams lighter.

Overall, the products from the bigger Tesco came to £35.44.

The basket in the Express added up to £41.25.

That's a price difference of nearly £6.

In fact, every single product I bought from the Express

was more expensive.

If you were to buy this exact shop every week for a year,

it would cost over £300 more than the shop from

the big supermarket.

So visiting your nearest convenience shop can be a more expensive option.

If you can, it just might be worth getting to a bigger store.

Even if you have to pay for the journey.

Tesco says the urban locations of their Tesco Express stores mean

higher running costs and prices reflect this.

Also they've, "locked the price of more than 1,000 everyday staples

until 2023" and are, "price matching

hundreds of products."

In Cirencester they say there's a nearby store offering an even

wider range of affordable food.

One big factor driving up food prices has been the fallout

from Russia's invasion of Ukraine.

Collectively, both countries produce 30% of global wheat exports.

Grain is one of the most important staples in our food system.

It's the basis of staples like bread, pasta and cereals,

and farmers rely on it to feed their animals.

When the conflict started the price of grain increased 50% in two weeks.

Like other commodities, investors speculate

on the future price of grain.

In March, investors piled into the wheat market

because they thought there was a big risk to Russian supply of wheat.

Ancl if you're on the right side of that trade, then

you could make a lot of money.

Equally, if you place the wrong bet, you could lose lots of money

because the price movements are so extreme.

They're betting on supply and demand.

Yeah.

Those trades, even before the grain is harvested,

can artificially inflate prices according to some experts.

Olivier de Schutter is the UN Special Rapporteur

on extreme poverty.

He believes the markets have affected our food bills.

When I go to the supermarket and I buy my weekly shop,

what impact does commodity trading have on those prices?

Increasingly financial actors, hedge funds, banks are active

in the trading of food commodities.

Ancl if all these actors do the same thing they make a huge profit simply

by signalling to the markets that they expect the prices to rise.

The prices will rise.

When food prices rise, as they are doing now,

it can have a knock on impact on health, hitting those on low

incomes the hardest.

Emma lives in Kent with her 14-year-old daughter Anna.

She receives Universal Credit, and child benefit.

But once her rent and bills leave her account, she says

she is left with just £20 per week.

So she now relies on free food from a community fridge

at the local church.

Before we'd just go to a supermarket and just put things

in our trolley and think, "Oh, we'll make this.

"Or we might make that."

Can't do that anymore.

Every bit of food you've got to really make it go a long way now.

The cost of living crisis has hit Emma hard, with her income

limited by health issues.

I've worked for over 30 years as a carer and then I got

arthritis in my spine.

So after having an operation, I couldn't go back to work.

So I had to then go on Universal Credit.

I mean, it was OK at first, but now, because gas ancl electric has gone up

so much and all the food has gone up so much, it doesn't matter

what you do, you haven't got the money there to pay it all.

I am worried about health.

Is that a pomegranate there?

It is difficult to try and rustle up a meal that's healthy

but sometimes you have to just go with what you can find.

OK, let's go.

We see a lot more diet related poor health amongst households that

are struggling financially because they've had to trade away

from that food that will be more healthy for them to eat.

As people's diets narrow we go to things that

are going to be fit in the freezer, that are going to be

safe, that are cheaper.

At a time when every penny counts, Emma has been finding ways

to make food go further.

What shall we make tonight, pasta bake?

Yeah.

She shared some of her top tips with us.

The slow cooker's brilliant.

It hardly takes any electric at all.

So that is a really cheap way of doing things.

Put it on in the morning - it's clone by 5.00 in the afternoon,

you've got a meal.

If you just cook one clay, you're only using the gas

and electric for that one clay and the rest of the clays you don't

have to because if you batch cook, it just all goes in the freezer.

You have to think, right, we've got to have this on Monday.

We've got to have that on Tuesday.

We're doing pasta bake, so that can do probably

2-3 days actually, then do shepherds pie on Tuesday.

Do you know how much that usually is, the mince?

We need to get mince for £2.

Every meal is having to be planned for what are we going to have?

What is cheap to have?

You really have got to use your imagination.

Yeah, bit more than that.

But even with a carefully planned approach to mealtimes,

the future is a huge concern for Emma.

OK, so, you can put the sauce in now.

Just make sure you cover a lot because if not,

the pasta goes crispy.

Emma says she is already skipping some meals.

She's not alone.

According to the Food Foundation nearly 7 million adults in the UK

are estimated to be eating smaller meals than usual, or skipping them

altogether, because they can't afford food And that's started

to show up as a health problem for GPs like Farzana Hussain

who runs a practice in East London.

Malnutrition is a huge concern right now.

I'm really concerned about some of my elderly patients,

I'm concerned about them not having enough food let alone

nutritious food.

As doctors we're always telling people to have their five a clay,

the five fruit and veg.

You know, people just can't afford that

at the moment.

I've got parents skipping meals regularly,

some who work for the NHS, you know, nurses who work for the NHS.

It's becoming the norm that people aren't eating.

Ancl that's shocking to be saying that sitting in London in 2022.

The price of vegetables has increased by nearly 12% and fruit

has gone up over 8% since last April.

Britain doesn't eat enough fruit and vegetables.

That's terrible for public health.

So, what we're going to see is health inequalities growing.

What you having?

Pizza, is that everything?

Vegetable lasagne, just one, yeah?

Good nutrition is most important for Britain's children.

For some a school meal is the only hot food they'll eat all day.

Cheese and beans?

There you go sweetheart, thank you.

This busy secondary school canteen in Greater Manchester serves more

than 1,000 pupils each day.

But according to Head Teacher Gt yon, cost increases are making it much

harder to put food on plates.

Even today, my chef has been telling me that the price of bread

and the price of margarine has gone up 14%.

Ancl the fundamental fact is, we can't keep pace with the changes.

So we're outstripping what we're getting already.

So your canteen is effectively running at a loss.

Yes.

Can I have an apple juice please?

You certainly can, is that all you're getting, darling?

Nearly 700 pupils here are eligible for free school meals,

whilst around 400 pay to use the canteen.

Put your account up for me please, thanks my love.

Can I have chicken and cheese please?

The school says the total cost of feeding pupils far exceeds

the money it gets from parents and Government funding.

It says the canteen is now running at a loss of around 70p

for every meal served.

I know some schools will make that hard decision of having to ask

parents to increase prices.

Ancl we are allowed to put up prices in line with some

measures of inflation.

But I'm concerned that that's pushing the problem

into the family home.

How is your balance sheet right now?

I wouldn't be surprised

if we were around £60,000 short at the end of the financial

year in March.

£60,000.

One and a half teachers.

We're having to move funds in a manner that we've never clone

previously to try and address the rising costs.

We really are struggling to see how we're going to get through this.

The government says it's "expanded access for free school meals"

with its school holiday activities and food program me and has widened

welfare funding available through the Household Support Fund.

Food inflation in the UK now stands at 14.7%,

a challenge for suppliers, retailers and consumers alike.

We assume since the Second World War that food prices will

just always come down.

But they're not.

They're going UP-

Those clays are over.

Ancl I think this is a test for us, as whether we are a decent society,

not just a good food culture, but a decent society

where we feed everyone a sustainable, wholesome,

healthy, affordable diet.

We're not doing that at the moment.

Every penny now counts.

So you've really got to think about what you're doing.

I'm really worried about what's going to happen because it's

bad enough as it is, but it's going to get a lot

worse if nothing is clone.

While it's predicted prices will continue to go up,

the speed at which they'll rise, is forecast to slow next year.

That's a bit of good news, but it won't ease the pain

many of us are feeling right now.