Households Spend Less on Food Due to Rising Costs

Households in the UK have significantly reduced their real-terms spending on food and non-alcoholic drinks in the year leading up to March 2023, according to the Office for National Statistics (ONS). While nominal spending in this category rose, the ONS reported a 7.5% real-terms decline when adjusted for inflation, marking it as the area where families made the most substantial cutbacks. Average weekly household expenditure increased nominally by £38.90, or 7%, to £567.70, but this translated to a real-terms decrease of £21.10, or 4%, due to inflationary pressures. The economic landscape during this period was heavily influenced by soaring energy bills and inflation, exacerbated by geopolitical tensions such as Russia's invasion of Ukraine. Kevin Brown, a savings specialist at Scottish Friendly, described the situation as “eye-opening,” emphasizing that families had limited control over these rising costs and were forced to prioritize their spending. A year later, many family budgets remain under significant strain. The disparity in spending between different income groups was stark, with the wealthiest fifth of households spending over twice as much weekly as the poorest fifth—£857.30 compared to £356.90. Despite an 18% nominal increase in spending on housing, fuel, and power, real-terms spending fell by 2%, indicating households are attempting to cut back amid rising prices. The poorest households faced the steepest percentage increase in energy costs, with a 49% rise compared to 42% for the wealthiest. The ONS highlighted that poorer households are more vulnerable to energy price hikes, as they have less capacity to mitigate these increases through reduced consumption or switching tariffs.