Store war sees till prices fall for 16th month

Retailers engaged in heavy discounting over the summer, especially on vegetables, fish, milk, cheese, and eggs.

Mike Watkins, head of retail and business insight at Nielsen, said that supermarkets took the “opportunity to capitalise on the improved summer weather by keeping prices low, to tempt shoppers to spend a little more on food and drink”.

The prices of the majority of the agricultural commodities that BRC-Nielsen tracked fell over the second quarter of this year.

Those falling input costs, along with subdued oil inflation “will be passed on to consumers” as the UK enjoys a buoyant recovery, said Helen Dickinson, director general of the BRC.

“While the Bank of England’s recent estimates suggest that retailers margins are still below pre-crisis levels, retailers will take heart from an outlook for costs that is broadly encouraging”, said Ms Dickinson.

Among the exceptions, cocoa prices increased on growing global demand for chocolate, driving them to a three-year high.

Recent data from Kantar Worldpanel showed that Tesco’s leading position has been eaten away by its younger foes, as the grocer’s market share fell to 28.8pc in the 12 weeks to August 17, from 30.2pc a year ago.

The overall growth of the grocery market fell to a 10-year low of 0.8pc in the 12 week period, said Edward Garner, of Kantar.

The falls in sticker prices seen in non-food retail sales eased slightly in August according to the BRC-Nielsen data, slowing from 3.3pc to 2.9pc.

Prices fell faster across DIY, gardening and hardware than in the previous month.

more