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Price of a flat white coffee tops £3 at UK's largest chains

Pret a Manger's flat white cost £3.05 in July, up from £2.75 last summer coffee prices - Jason Alden/Bloomberg
Pret a Manger's flat white cost £3.05 in July, up from £2.75 last summer coffee prices - Jason Alden/Bloomberg

The price of a flat white has topped £3 across Britain's largest coffee shops for the first time, as households face a growing squeeze on their wallets.

Coffee drinkers are facing price increases of as much as 21pc on last year for their daily caffeine fix, according to the latest figures from UCC Coffee, which showed that Costa was the only major coffee chain where customers could get a flat white for under £3 in July.

Other drinks, including americanos and cappuccinos, had risen by 50p per cup between August 2021 and July this year.

Telegraph analysis suggested prices had jumped even further in the past few weeks, with Pret a Manger stores on Friday selling a number of its coffees for 20p more than the July numbers, while a string of Costa Coffee options were 40p more expensive, including flat whites costing £3.30.

Paul Rooke, executive director at the British Coffee Association, said the increases were likely to be spurred in part by higher labour and energy costs for many of the high street chains. Starbucks is said to be considering selling its UK business amid rising costs, although the company has said it is not in a formal sales process.

Meanwhile, the price of coffee beans is rising sharply. Mr Rooke said: "Prices for green coffee, unprocessed beans, have been rising for most of the last two years, driven by demand coming back after lockdowns and also weather-related issues, particularly in Brazil last year, where there were some areas damaged by frost."

Brazil is the world's largest exporter of coffee, producing around a third of the world's beans, largely Arabica coffee, meaning any issues in the country have a significant impact on prices. Over the past two years, Arabica futures have risen by around 80pc - a surge which began when Brazil was hit by drought and cold weather, prompting many farmers to switch to crops such as producing fertiliser.

Recent figures from Brazil suggest production is set to remain down this year. According to a recent Bloomberg study, many farmers in the Minas Gerais state, its largest producing region, are seeing bigger-than-expected losses for their coffee crops.

Experts have said this could result in production hitting 32m bags this year, compared with 38m originally forecast in March, and almost half the amount that could be achieved in a high-yielding cycle.

Production pressures have fed into supermarket pricing, with figures compiled by Assosia, the retail data company, for The Telegraph showing the average price increase for a 200g bag of coffee across Tesco, Sainsbury's, Asda and Morrisons is around 17pc, or 76p, higher. Kenco instant coffee is now 30pc more expensive than it was in 2021, according to Assosia.

The price increases come amid wider grocery inflation as food and drink producers struggle with steeper packaging and energy costs. Earlier this year, Heinz became embroiled in a row with Tesco after it was said to have demanded a 30pc price increase at some retailers. Supermarkets can choose to pass all that increase on to customers or swallow some of the rise.

Grocery bills are expected to rise by £533 across the UK this year, according to analysts at Kantar. In the four weeks to August 7, prices were up 11.6pc - the highest level of inflation recorded by Kantar in the past 14 years.

Fraser McKevitt, the head of retail and consumer insight at Kantar, said: “As predicted, we’ve now hit a new peak in grocery price inflation, with products like butter, milk and poultry in particular seeing some of the biggest jumps.”