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Cost of groceries 'falls £58' as supermarkets wage price war

Shoppers are enjoying cheaper prices at the tills as supermarkets vie to undercut their rivals, new figures have found.

Groceries now cost 1.7% less on average than a year ago, saving the average shopper £58 over that time, according to analysts Kantar Worldpanel.

The rise of discounters Aldi and Lidl has played a key role as the traditional supermarket giants are forced to slash prices in a bid to lure customers back through their doors.

Separate research from analysts Nielsen shows Aldi and Lidl now command more than a tenth of the grocery market, rising from 8.8% to 11% in the last 12 months.

Over the same period, Tesco, Asda, Sainsbury's and Morrisons saw their combined share slide from 71.7% to 69.6%.

Similarly, in the last three months the big four's sales either fell or remained flat when compared with the same time last year, while Aldi's and Lidl's sales rocketed 27.6% and 23.3% respectively.

"The other supermarkets will be particularly disappointed that discounter growth shows little sign of slowing," said Nielsen's retail and business insight head Mike Watkins.

"Aldi's year-on-year rise was their highest in nearly 18 months whilst Lidl's was their highest in nearly a year."

And it appears the big four are being squeezed on both sides, with the upper market stores enjoying healthy growth.

Marks & Spencer had the highest growth in year-on-year sales (3.0%) while Waitrose had the largest increase in new shoppers (2.1%), according to Nielsen.

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