Tuesday, 18 January 2011

The sweet pressure of inflation

I walked into the supermarket the other day and found myself staring at the sweets on an aisle end. At eye-level, staring me in the face, were Polos: the mint with a hole.

I was flung into nostalgia. When I was a child I used to love these, because they always seemed such good value for money. For 5p I could get a whole pack. Each sweet could be sucked for hours. With a bit of good self-restraint it would last me an entire week until I had pocket money again. I didn't like the fruit-flavoured ones: those would go all sticky and glue themselves together before I finished them all. My favourites were the basic mints, with extra kudos points for sucking them into the finest ring without them breaking.

And then, of course, the price went up to 6p. No longer could I afford one tube each week. Now the pack would have to last longer. (I now know it is 20% longer, that over 6 weeks I could buy 5 packs ... but that was a lifetime to a young girl!)

In my teens Rowntrees was bought by Nestle, much to my disappointment. For a long time I have boycotted Nestle products due to their stance on baby milk; now all my favourite sweets and chocolates would have to be abandoned. In amongst the list were Polos.

So it was a shock to find myself staring at them last week and realise that they were now 44p. An eight-fold increase on my childhood memories! Could this be right?

I was once told a rule of thumb about inflation: everything doubles in price over ten years. Thus something costing £1 now will cost £2 at the beginning of 2021. For the sake of argument I am going to say that it is 30 years since polos cost 5p: that would make them worth 40p now, going by my inflation calculation. Given that I am sure the 5p price was more than thirty years ago (I hate to admit that: I have a round-figure-number birthday due this year!) the 44p price is probably in line with inflation over the period. How scary! I can expect my grandchildren to be paying closer to £4 per packet!

Yet, if I go to a website calculator for the period since, say, 1976, I should expect my 5p sweets to now cost 27p. That is a massive 17p per packet of increased profit for Nestle more than would be reasonable to expect. And that shows my rule of thumb to be flawed, at the very least! The UK must have had some delightfully low inflation years.

Today the government announced our CPI to be 3.7%, having been consistently over 3% for the last year despite the Bank of England's responsibility to keep it below that figure. To a large extent this is difficult for us to understand. All we know is that everything feels more expensive, particularly as wages and pensions are frozen or falling, and as jobs and careers are in peril. At that consistent rate, my 44p polos will cost 63p in ten years time: check back in a decade and find out how close we are!

So how much should your favourite sweets be costing now? Can such things as Penny Chews exist? Have a play with the calculator below and let me know what you find out.


make do mum said...

Great post. I remember a creme egg costing 12p when I was about 7 (1981), but they are 50p now – the calculator says 35p. It wouldn't be so bad but they've made them smaller. Won't stop me eating them though!

Very Bored in Catalunya said...

made do mum is right, not only has everything gone up but everything has shrunk.

Mars Bars & Snickers etc I notice are about a third smaller than they used to be (or maybe that's just here).

Chocolate should forever be 20p, bag of crisps 10 and a curly wurly should be the length of a ruler.

EmmaK said...

Great post! No the Mars Bars and Snickers are small here too. Damn them all to hell. They are making me buy two of them just to get the 'sugar fix' I used to get from one.

Mark said...

I liked this - as I often wonder about the price of things and sweets is quite high on the list of comparators.

But of course at a slightly more serious economic level there are many factors, not the least of which is your starting point. Food generally in the UK is cheaper and a smaller proportion of domestic incomes than it has ever been. And some other goods (electricals and bicycles are good example) are much cheaper in real terms - sometimes in absolute terms too.

Tim Harford's book - The undercover Economist - is good popular read on this sort of thing; honest, it's actually quite fun.

cheshire wife said...

We can massage the figures as much as we like, but it won't make any difference to the actual cost of anything. It is human nature to believe that life was cheaper and better in days gone by, which is alright as long as you don't start living in the past.

Troy said...

I remember when at school in the 60's I could buy a Sherbert Fountain for 3d (1.25p) a quarter (4oz) of pineapple chunks at 9d (3.75p) and a quarter of sherbert lemons for 10d (4.2p). I can't believe how much kids' sweets cost nowadays. When I take my 9 year old into the local shop I try to persuade him to buy a Refresher bar (10p) or the Fudge Bar at 17p but he always wants M&Ms or the like which give no change out of 50p (a ten bob note!).
Sorry, shown my age a bit here haven't I?

Working Mum said...

Don't get me started! Cranberries doubled in price from Christmas 2009 to 2010 and butter has gone up from 95p per pack to £1.30 in one year (approx 50% increase in one year)!!

I know that in 1976 I could buy my weekly sweet fix with a sixpence (2.5p in new money) and I guess now it would be about 50p so my daughter's pocket money seems about right!

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