Dairy led with +4.2%, meat +3.8%, and fresh produce +2.9%.

Overall CPI stood at 2.9%, showing groceries are outpacing general inflation and squeezing household budgets.

What’s Driving Food-Price Inflation?

Packaging Costs (+8%)

Packaging-material prices jumped 8% due to higher raw-material and freight costs, pushing carton and film expenses upward.

Labour Costs (+6%)

Labour shortages and wage increases of around 6% across farms and processing facilities have further driven up production costs.

Category Breakdown

Dairy Products (+4.2%): Energy and feed-price hikes have pushed milk, cheese, and butter costs higher.

Meat & Poultry (+3.8%): Elevated feed costs and disease-management expenses are squeezing margins.

Fresh Produce (+2.9%): Import-dependent fruits face steep shipping costs, while domestic vegetables grapple with harvest labour shortages.

Comparing to Overall CPI

With CPI at 2.9%, food prices are rising faster than the general inflation rate, leaving less disposable income for other spending.

Three Consumer-Staples Stocks to Watch

Tesco PLC (TSCO): Market dominance and a strong own-label range give it pricing power.

Sainsbury’s PLC (SBRY): A growing convenience-store network and robust private labels help manage margin pressure.

Unilever PLC (ULVR): Global brands and cost-efficient reformulations support resilience amid input-cost hikes.

Two Basket-Hedge ETF Strategies

SPDR MSCI Europe Consumer Staples ETF (STN): Broad exposure to defensive staples in Europe.

Vanguard Consumer Staples ETF (VDC): Global staples hedge, paired with a short discretionary-sector overlay for balance.

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