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Spare a thought for Mark Carney this Christmas. While the rest of us write letters to Santa, the Bank of England governor will be penning a more sombre missive to the chancellor explaining why the inflation target has been missed. There may also be a postcript — “please cling on to power so we don’t have to move to Birmingham!”
Figures this week showed that prices increased last month at the fastest rate for more than five years with consumer price inflation (CPI) now running at 3.1 per cent.
This is an average figure, calculated by comparing the prices of a large “basket” of goods and services. But the latest issue of Good Housekeeping magazine has some distinctly un-festive news. Headlined “The rising cost of Christmas”, every single item in its festive dinner “basket” has increased in price this year, barring the Christmas pud.
The study compared prices of seasonal staples needed to make Christmas dinner for eight people, including a turkey, spuds, veg, brandy butter and mince pies from 10 different UK supermarkets. Nine were more expensive than last year, with an average price increase of 16 per cent. The only one to cut prices was M&S.
So who was the cheapest? No surprises there — Lidl and Aldi, where all of the above will cost less than £26. Iceland was in third place, at just over £28, and Waitrose was the most expensive at nearly £42.
So the message is clear — if you want to beat inflation, check out the discount supermarkets. What’s more, you may be pleasantly surprised by what you find.
Aldi and Lidl are growing fast. It does amuse me when I see local newspaper stories railing against their arrival in various upmarket areas of the provinces, as if the opening of a discount grocer would attract hordes of “riff-raff” and drag down house prices.
Yet discount supermarkets are a paradise for the middle classes. They are so much more continental than our homegrown grocers — antipasti, fresh pasta, olive oil, Parma ham (yes, the real thing) and an impressive array of cheeses can be yours for not much outlay. And at this time of year, panettone and stollen, too. When our local Lidl does “French Week” or “Italian Week” promotions, the range of Waitrose-quality fare is even more impressive.
In the fruit and veg aisle, four different items a week are sold for knockdown prices depending on what’s in season. I still have fig jam in the cupboard that we made last summer after returning with a whole tray of ripe, oozing fruit for less than a fiver.
This week’s market share data from Kantar Worldpanel showed that Aldi is the UK’s fastest-growing supermarket with sales up more than 15 per cent year-on-year.
The analysts are particularly excited by the growth of Aldi’s luxury range (branded Specially Selected), where sales have increased by 25 per cent in the past 12 weeks compared to a year previously. Award-winning items from this range include Normandy baking camembert, frozen Caprino Verde pizza and Scandinavian blackcurrant conserve.
Lidl has a similar Deluxe range (I swear by its frozen beef wellingtons) and Iceland is selling frozen lobster, sea bass and scallops. I picked up some frozen avocado halves in there the other day — possibly the most hipster item ever to be sold by a discount grocer.
It is surely no coincidence that the previously unassailable M&S Simply Food format is suffering. Chief executive Steve Rowe referred to “stronger headwinds” last month when the retailer announced it was slowing expansion of the standalone stores.
And when was the last time you laughed out loud in M&S? What the discounters are really adept at is mimicking well-known upmarket brands. This summer, Lidl was selling Jeeves (which reminded me of Pimm's) and Bitterol, which looks suspiciously similar to the Italian aperitif Aperol.
And then there’s Putinoff, its premium vodka brand. I’ve never tried it — I thought it was an internet joke until I actually saw it on the shelves — but I can attest that Lidl’s posh Hortus artisanal gin is excellent. This Christmas, it is also selling salted caramel and Marc de Champagne truffles in posh round boxes. Sound familiar?
Aldi also shows a sense of humour with its gin range, which is called Gin Lane, although there’s no Hogarth picture on the label. But Iceland has its own take on the Walls Vienetta called the Mini Vienna — which comes on a stick, and practically has cult status.
If you have the time and penny-pinching inclination to shop in two different places, you could go for what I call the “budget and bling” approach. Buy as much as you can in the discount grocer — then go to a really high end outlet for the really special things.
We are lucky to have excellent local butchers and fishmongers nearby — and the FT office is minutes away from Borough Market. This feels a worthwhile way of spending the savings from our main shop.
While Waitrose has the priciest Christmas basket, don’t forget that holders of the My Waitrose loyalty card can register online and get 20 per cent off 10 items of their choice, including expensive things such as meat, fish and luxury ready meals.
If your partner registers for their own card, you can get 20 per cent off another 10 things — just make sure they are in separate transactions when you pay. And don’t forget, you will each be entitled to a free coffee too. Merry Christmas!