Friday, Jan 04, 2013

HPC this year?

Telegraph: Waitrose boss: Britons should brace themselves for 'massive' food price hikes

Britain's recent food price rises are "just the tip of the iceberg," and consumers should brace themselves for "massive" hikes in some commodities this year.
On a completely different topic with no connection to housing.
If any readers took advantage of the offer in October 2012 of 4% AER interest on the Lloyds TSB Vantage current account, I suggest that you check what interest you are receiving.
I don’t know whether this was an individual branch problem or across the branch network but thanks to errors by Lloyds, I have learned that a number of customers are receiving 3% rather than 4%.
After a good rollicking, Lloyds admitted they have a problem with staff not understanding how to set up these accounts therefore it might be in your interests to check.

Posted by mr g @ 07:14 PM (3613 views) Add Comment

26 Comments

1. mark said...

Tescos have hiked many prices by around 20% on the 1st Jan

MW did you know Tescos owns the one stop shops appearing as your local corner shop.

Friday, January 4, 2013 10:16PM Report Comment
 

2. mark wadsworth said...

Food prices are only going up because the boss of Waitrose ate all the pies, going by the look of him.

Mark, yes, you hate Tesco*, I got that bit. What do you want me to say or do about it?

* They are not called Tescos or even Tesco's. Their company name and trading name is Tesco. No "s".

Friday, January 4, 2013 10:35PM Report Comment
 

3. voiceofreason said...

Yup, commodities will go up as world population outstrips resources.
Doesnt bother me much as I dont have a shedload of debt. And I wont let my kids get into debt either. We will tick along just fine.

Friday, January 4, 2013 11:25PM Report Comment
 

4. drewster said...

Fair point by Mr Waitrose, but he clearly explains that the problem is weather-related, nothing to do with money-printing or any of that.

“We’re seeing input food inflation of around 3 to 3.5pc, but we expect it go up to as much as five.”

It's hardly hyperinflation, is it?

Friday, January 4, 2013 11:43PM Report Comment
 

5. libertas said...

"What You Should Know About Inflation" Henry Hazlitt (1964)

Friday, January 4, 2013 11:59PM Report Comment
 

6. libertas said...

Mark, traditionally, 20% inflation was hyperinflation.

Planning fees up just before Christmas by 18%. Others in the sector following suit. We are in for a world of pain. Maybe this is why they let in so many from the third world, knowing they knew how to cope with this crap and put up with it?

Saturday, January 5, 2013 12:00AM Report Comment
 

7. drewster said...

Mark @ 1,
Do you have a source or link for this 20% story? Or is it just your own observation from walking round the shop?

Saturday, January 5, 2013 12:32AM Report Comment
 

8. novice pete said...

Don't worry the banks via the B.o.E. are going to start lending agian soon. We're all going to be property millionaires all over again!

I surrender, please let me be a debt slave, I promise to spend, spend spend, and then let the Go'mint bail me out, please go'mint help me become an imanginary BTL millionaire.
http://uk.reuters.com/article/2013/01/03/uk-banks-plan-idUKBRE90206E20130103

Saturday, January 5, 2013 12:48AM Report Comment
 

9. i remember the 90`s said...

@1 what a load of tosh ,can u imagine punters not noticing ,as for Tesco owning one stop its not news it has been that for ages .

Saturday, January 5, 2013 09:51AM Report Comment
 

10. hpwatcher said...

It's hardly hyperinflation, is it?

Hahahahahah Let's just wait and see what happens next.

Saturday, January 5, 2013 10:11AM Report Comment
 

11. Chrisvow said...

re MW 2
They are known as "Tescos's" in Bristol

Saturday, January 5, 2013 10:34AM Report Comment
 

12. alan said...

"Let's just wait and see what happens next...."

Just noticed an article which said Obama had managed to double the US Defecit during his presidency. There is so much money printing I can't understand why Oil and Gold haven't gone higher. I suspect government intervention could be responsible. Oh NO you may say...but what about the Libor game?

Lots more QE will soon kick in to raise inflation still more. It isn't the yearly rate we need to worry about, it's the progressive year on year impact. Rapid inflation will underpin house prices and unless IRs go up in 2013, it will be a gentle decline (like 2%) in prices for 2013 as affordability considerations keep down prices (IMHO).

Higher inflation means being a millionare isn't anything special, anymore. The National Lottery created about 3,000 since it kicked off. How they spent the cash is an interesting read. Link:
http://www.camelotgroup.co.uk/documents/pdf/TheNationalLotterys3000MillionairesReport22102012

Saturday, January 5, 2013 03:03PM Report Comment
 

13. mark said...

drewster it is our observations, we keep a diary of prices, much the same with the old tins we have in the house for quality street last year it was a kilo (2011), this year (2012) it was 800g, we have a tin around 5 years old which was nearly 2kg, the price stays the same but you get smaller tins and less chocolates

tescos tuna went up from 50p to 64p, pasta from £1 to £1.20, a pack of so called on offer chicken whilst on offer went up from £1.40 to £1.48 not sure how that managed to still be "half price" , I cant be bothered to type a full list but on average it was a 20% hike on most foods we buy from xmas 2012 to jan 2nd 2013

Sunday, January 6, 2013 12:45PM Report Comment
 

14. stillthinking said...

Why think that prices would stay at zero? Prices should have been going lower. Prices didn't necessarily go from 1.00 to 1.04, maybe they should have been at .96 .

Anyway, expansion of the amount of money is much higher than nominal prices rises (the symptom)

http://www.tutor2u.net/economics/content/topics/monetarypolicy/money_supply.htm

for the UK most of the expansion has been credit expansion, which somebody has to pay back, which is why a few diehards think that we eventually crash into deflation because ultimately interest rates must rise to combat inflation while the country has unaffordable debts.

Sunday, January 6, 2013 12:55PM Report Comment
 

15. tick tock said...

Bread in my local Tesco is now about 30% higher than before new year, not all loaves, but most. The removal of 2 for £2 offers seems to have suddenly revealed a per loaf price far above anything known previously, so I wouldn't argue with Mark on the 20% rise generally. However, the same loaf is 40% cheaper in Aldi (Warburtons Toastie £1.40 Tesco, £1 in Aldi) so you don't have to pay if you don't want to.

Sunday, January 6, 2013 12:58PM Report Comment
 

16. khards said...

I have not seen general price rises in Aldi or anywhere else in ROI. Infact petrol is now over 10c cheaper than 6 months ago. Since exchange rates have not moved much I can conclude the following:
1, Tesco are attempting to increase cooperate profits.
2, Branded goods manufactures are attempting to increase cooperate profits. (Kellogs, Coca-Cola, Birdseye etc..)

So I would suggest that where possible not shopping at Tesco and not buying products made by those companies floated on the stock exchange.

Sunday, January 6, 2013 01:25PM Report Comment
 

17. quiet guy said...

An Aldi and Lidl store have opened in my town. I am enjoying cheaper prices for many common shopping items. You have to shop around.

I've also noticed significant differences between Tesco store prices in different places. Affluent areas are sharged more than poor areas.

Regarding the title of this article, I don't think there will be a HPC this year; just a gentle chipping by a percent or two in nominal terms.

Sunday, January 6, 2013 01:44PM Report Comment
 

18. khards said...

@16 - That's very true.

Tesco value rice pudding in Galway, ROI is 54c (44p), UK price is 12p almost 1/4 of the price. What is the justification for this? I can understand a few pence difference to tak in the extra 2% VAT and transport, but 32p per can is just profittering.

Sunday, January 6, 2013 02:14PM Report Comment
 

19. mark said...

khards

did you know when you see "buy one get one free" or "50% off" in a Tescos the offer is usually funded by the brand or company who made it being marketed at Tescos request, a local farmer near me used to supply tescos strawberries until they started asking him to do just this "2 for 1" offer which he said would have put him into a loss on the sale, he tried to argue his case with tescos they dumped him just prior to a delivery going out and refused the deliveries, leaving him with strawberries packed for tescos he had to dump at his loss, he was not allowed to sell it repack it or give it away it had to be dumped into containers supervised by supermarket, just because he could not afford to finance Tescos shop offer.

Sunday, January 6, 2013 05:25PM Report Comment
 

20. khards said...

I suspect the devil is in the contract detail. I suspect many suppliers have no option but to sign a Tesco contract or lose a massive market share.

Sunday, January 6, 2013 07:36PM Report Comment
 

21. Jju said...

Potato crops 2012 worst on record, seed potatoes in limited supply for this year. One of the wettest ends to the year on record which is already affecting barley, wheat and other cereal crops for harvesting this year, they aren't as far on as they should be. More importing from the EU then, all these excuses are just a way for the supermarkets and food manufacturers to hike prices.

Monday, January 7, 2013 08:19AM Report Comment
 

22. nickb said...

Could it not be "global warming, stupid"? http://www.businessweek.com/articles/2012-11-01/its-global-warming-stupid
2012 was the second wettest year on record for the UK and the wettest year on record in England, following a drought in the first part of the year. I don't think there is any way to link those events to bailouts of the banking sector. As the earth has warmed however, there is more water vapour in the atmosphere and an amplification of associated weather events. As explained by orthodox climatology.
N

Monday, January 7, 2013 11:15AM Report Comment
 

23. mark wadsworth said...

Mark, that is always the problem when a small business starts supplying a big customer, at first it's all sweetness and light, yippee, our turnover has doubled each year, but then once you are >50% reliant on one large customer, they start screwing back the margins, a little more each year until you can barely survive. This applies to all large concerns, not just retailers, the motor manufacturers do it as well.

And when you go bankrupt, they simply buy up your factory or farm for cheap and keep all the profits for themselves. I've seen it dozens of times in real life, the only time that one of our clients actually survived and prospered was (ironically enough) a client whose main customer was Tesco.

Monday, January 7, 2013 11:23AM Report Comment
 

24. mark wadsworth said...

NickB, OK, let's assume for the sake of this discussion that the appalling weather in the UK (from the point of view of farmers) for the past two years was down to "catastrophic climate change". Is it not possible that some arid or colder areas which are presently of marginal value as farmland become economically viable?

Remember, it is only two thin strips of the earth's surface which is useful for farming (to the north and south of the equator), a third of the area is too hot and dry (deserts) and a third is too cold and dry (arctic tundra). These usable strips might move northwards and southwards, but because so much land mass is north of the equator, we'll gain more in the north than we lose in the south.

Problem solved :-)

Monday, January 7, 2013 11:28AM Report Comment
 

25. nickb said...

@Mark,
Interesting theory. but how much are you willing to bet on it?
If you think about rainfall, the basic prediction is that wet areas become wetter and dry areas tend to become drier, with rainfall also increasing overall. So it seems kind of hard to translate that into 'fertile strips shifting location'.
N

Monday, January 7, 2013 11:44AM Report Comment
 

26. mark wadsworth said...

Nick B: "the basic prediction is that wet areas become wetter and dry areas tend to become drier, with rainfall also increasing overall"

Fair enough, that is the prediction, but that doesn't rule out that some dry areas will become less dry, or does it?

How much will I bet on it? My life?

Monday, January 7, 2013 12:31PM Report Comment
 

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