Personal inflation and your shopping basket

Every month the Office for National Statistics publishes a figure for consumer price inflation. It is calculated by pricing a fixed basket of goods and services, chosen to represent typical household spending across the country, and comparing it against the same basket a year earlier.

It is a good measure of what it measures. It is also an average of a basket that is not yours, bought in shops you may not use, in proportions that are probably not your proportions.

Why your figure differs from the published one

The national basket is weighted by average national spending. Your basket is weighted by what you actually buy. If a third of your food spend goes on things that rose sharply, and the national basket gives those items a small weight, your experience of inflation is simply different from the published number.

• Composition. A household buying a lot of one category is exposed to that category's price movements far more than the average is.
• Retailer. The same product does not move at the same rate across every supermarket, and the published figure blends them.
• Own brand and branded. Substituting between the two changes your bill without any underlying price changing at all.
• Pack size. A product that keeps its price and loses weight has raised its unit price, and a total-only view will never show it.

The measurement problem

To know your own rate you need the same basket priced at two points in time. That is exactly what a receipt gives you and what a bank statement does not: 16 named lines with the price actually charged, rather than one figure of £36.19 at a supermarket.

A total tells you what you spent. It cannot distinguish a more expensive shop from a bigger one, and those are opposite problems with opposite responses. Line items separate them, because the same named product at two prices is a price change, and a new product on the list is a basket change.

This is why the useful comparison is a repeat purchase. A weekly shop is mostly the same items week after week, which means most of the basket is directly comparable without any statistical adjustment at all.

Shrinkflation is a unit price problem

A pack that goes from 400g to 360g at the same price is a price rise of a little over ten per cent, and it appears nowhere in your total. Receipts carry the pack size in the product description, which is why the till roll text is worth preserving exactly as printed rather than tidying it into a clean product name.

It is one of the reasons Bagged stores the description as it appeared on the paper. HEINZ BEANS 4X415G is a more useful record than the word beans.

What this needs, and what it does not

Personal inflation is the one thing in this product that genuinely requires history. A single receipt produces a complete ultra-processed figure on day one, but a price comparison needs at least two shops, and it gets meaningfully better after several.

Bagged is explicit about that rather than showing an empty chart and asking you to come back in a month. The figure that works immediately works immediately, and the one that needs history says so.