Supermarket price inflation lower
Increasing supermarket competition has dragged price inflation in the sector down to its lowest level for almost eight years.
Supermarket inflation fell to 0.8% in the 12 weeks to June 22, according to the latest till-roll figures from Kantar Worldpanel, which is the lowest level the research group has seen since it began collecting this data in October 2006.
Kantar puts this fall down to the growing supermarket price war sparked by the country's big four grocers - Tesco, Sainsbury's, Asda and Morrisons - as their market shares are squeezed by discounters such as Aldi and Lidl.
Morrisons' share dropped to 10.9% from 11.7% as sales fell 3.8%, while Tesco's market share dipped to 28.9% from 30.3% last year as sales slipped 1.9% over the quarter.
However, the other two majors fared better, with Sainsbury's sales rising 3% and its market share inching up to 16.7% from 16.6% a year ago. Asda's sales grew by 3.6% and its market share lifted to 17.1% from 16.9%.
But the star performers of the grocery sector continue to be the German discount operations Aldi and Lidl, who both held onto their record market shares from the last 12-week period of 4.7% and 3.6% respectively.
In the last two weeks, Lidl said it will spend £220 million opening 20 stores this year, creating 2,500 jobs, while Sainsbury's is to enter the discount market in a joint venture with Danish discounter Netto as part of a £25 million plan that will see 15 stores opened in the north of England by 2015.
At the upmarket end of the sector, Waitrose saw its sales rise 6.9% and boosted its market share to 5% from 4.8%.
The overall supermarket sector saw sales grow 2.8%, bouncing back from the previous period's historic low of 1.7% growth.
Kantar Worldpanel consumer insight consultant Fraser McKevitt said: "The low grocery price inflation in this period will be welcome news for household budgets.
"The outlook is positive as we predict continuing sub 1% levels into the near future, providing some relief for cash-strapped consumers."