Fruit and vegetable prices

Over the five-year period through 2024-25, fruit and vegetable prices are forecast to increase at a compound annual rate of 4.1%, to reach 128.3 points. In the UK, fruit and vegetables are somewhat of an expensive commodity considering many types and variants of fruit and vegetables cannot be grown domestically and must therefore be imported at a relatively significant expense. According to Defra, the food production to supply ratio of the United Kingdom, colloquially known as the "self-sufficiency ratio" and calculated as the farm-gate value of raw food production divided by the value of raw food for human consumption, was estimated to be 60% for all food and 75% for foods that can be produced domestically in 2020. However, self-sufficiency in fruit and vegetables are lower at 16% and 54% respectively.

Fruit and vegetable prices fluctuate in tandem with supply relative to demand and, if sourcing fruit and vegetable from overseas, exchange rate volatility, distribution and fuel costs, and potential third-country tariffs are notable factors that influence price movement. The market supply of fruit and vegetables depends on the volume and quality of yield in key growing regions, both domestically and overseas, which are in turn reliant on the favourability for growing conditions each year. Meanwhile, the purchasing power of supermarkets, specifically when negotiating contracts with upstream suppliers, leverages a degree of control over the consumer price of fruit and vegetables. As a result of this, the majority of producers are price takers. Underlying demand for fruit and vegetables in consumer end markets is sensitive to changes in income, trends in health consciousness, and attitudes regarding the "sustainable sourcing" or otherwise "local sourcing" of fruit and vegetables.

Fruit and vegetable prices fell during 2020-21 despite a sharp increase in demand mainly due to supermarket price wars. These firms resulted to price matching with other retailers in order to remain competitive, which placed downward pressure on margins. From April 2021, lockdown measures were eased gradually supporting demand from the food service sector, placing upward pressure on prices. In 2021-22, the price of fruit and vegetables in the United Kingdom expanded by 2.4%.

The pandemic resulted in severe market disruption and logistics issues across the economy, including vegetable distribution has not been immune. Temporary border closures, suspended visas by way of travel bans, and other measures ultimately intended to contain and mitigate the spread of coronavirus (e.g. mandated social distancing measures) have all combined to induce an unprecedented exogeneous shock to the economy. Relative to fruit and vegetable prices, prices have inflated due to numerous factors, including a spike in demand, with many downstream consumers "panic buying" during the initial lockdown period; and limited supply, as temporary closures across the logistics industry and limited availability of seasonal workers - this left fruit and vegetable farmers unable to accelerate output and cater for a sharp upturn in demand - forced retailers to find alternative suppliers, an often costly endeavour whereby heightened overheads are reimbursed via in final selling prices. Irrespective of supply chain cost pressures, however, any would-be exponential inflation in the price of fruit and vegetables has been, to a certain extent, counterbalanced by food retailer pricing strategies in response to the implications of the pandemic. In 2022-23, severe hot weather and strong inflationary pressure has driven prices of food, including fruit and vegetables. According to the ONS, CPI inflation reached 11.2% in October 2022, driving up input prices. According to Defra, fruit and vegetable prices expanded on average by 37% in the first three months of 2022, when compared to the same period in 2020. Prices are easing as supply chain issues ease, but the index is set to rise by 1.4% in 2025-26. The expansion in more people buying organic produce is pushing up prices of fruit and vegetables.