Price of supermarket loaf up 8.5% in past two years

The average price of a large loaf of wrapped bread in Britain’s supermarkets has risen from 94p in 2016 to £1.02 today.

Looking at the price of 750g-plus loaves in Tesco, Asda, Sainsbury’s, Morrisons and Waitrose, a branded loaf has risen 8.5% in the past two years. The findings are based on BrandView data for SKUs stocked in the stores in June 2016 and in June 2018.

Wrapped bread prices began increasing in June 2016 following a long period of decline. It has been used as a weapon in the supermarkets’ battle for market share in the face of the rise of discount retailers.

It heaped further pressure on plant bakers already fighting rising commodity and labour costs.

Last year, Associated British Foods reported that its Allied Bakeries had sustained a loss in the year ending 16 September and was looking to increase retail prices. And in its latest annual report, posted in June 2017, Warburtons said its turnover had fallen more than £25m last year in the “increasingly competitive” wrapped bread market.

In the past two years, the greatest recovery in price – in pence terms – has been seen in Allied’s Kingsmill, which has increased from an average of 87p to £1. Warburtons’ loaves have risen from £1.19 to £1.28, and Hovis' from £1.10 to £1.18.

Own-label loaves have increased at a slower rate, rising 7% from 72p in 2016 to 77p this month.

But despite the increases in the past two years, bread prices remain below levels recorded in 2013 and 2014, when they averaged between £1.12 and £1.27.

Bakery manufacturers are also using new product development to add value to the category.

This has included Warburtons’ first wrapped bloomer, which rolled out in January. Called Lancashire’s Thorough Bread, it is selling for £1.55 in Sainsbury’s and £1.50 in Morrisons, but has been discounted to £1.25 in Asda.

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