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Supermarket competition 'keeping food prices down'

By Josie Clarke

Published 05/10/2016

Prices were starting to stabilise after post-Brexit uncertainty, said MySupermarket chief executive Gilad Simhony
Prices were starting to stabilise after post-Brexit uncertainty, said MySupermarket chief executive Gilad Simhony

The cost of a basket of groceries has fallen again as the supermarket price war overcomes inflation issues caused by the weaker pound, figures show.

A basket of 35 popular items cost 16p less last month than it did in August, at £83.19, and was more than 3%, or £2.74, cheaper than it was at the same time last year, according to the mySupermarket Groceries Tracker.

Broccoli was 11% cheaper last month compared with August, crisps were 5% cheaper and eggs and the price of pasta dropped by some 3%.

Compared with September last year, broccoli is now 29% cheaper, bananas cost 11% less, frozen fish fingers are down 8% and onions are down 20%.

However, some products increased in price on last month, such as mushrooms (15%) and onions (26%).

MySupermarket chief executive Gilad Simhony said prices were beginning to stabilise after a period of post-Brexit uncertainty.

He added: "The price wars between the retailers appears to have overcome any inflation issues caused by the weaker sterling.

"We are also seeing both consumer confidence and prices stabilising across the board, which is a positive sign for the UK grocery market."

Meanwhile, the BRC-Nielsen Shop Price Index has said shoppers' purchases were 1.8% cheaper last month than at the same time last year, and only marginally different from the 2% recorded in August.

Food prices fell by 1.3% in September, the highest year-on-year fall ever recorded for food and only the second time that food prices have fallen by more than 1% since the index began.

Non-food deflation showed a slight slowdown to 2.1% from 2.5% the month before.

The report said fierce competition was playing a vital role in keeping prices down.

Despite rising global food prices and the devaluation of the exchange rate, shop prices were still showing little sign of nearing inflationary territory.

British Retail Consortium chief executive Helen Dickinson said: "We are now in the fourth year of falling shop prices, so the record-setting run of shop price deflation continues, which is great news for consumers.

"This is as a direct result of the intense competition and transformational change in the retail industry, with consumers having access to more choices and greater ability to compare prices than ever before."

Mike Watkins, Nielsen head of retailer and business insight, added: "With a new round price cuts by supermarkets in September and fresh foods also promoted to encourage visits, this has helped maintain deflation in shop prices."

Belfast Telegraph

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