FOOD inflation has hit an all- time low, spelling good news for hard up consumers as supermarkets slash their prices in the run- up to Christmas.
Food inflation grew by just 0.3 per cent in September, matching the lowest level ever recorded in December 2006, according to the latest BRC-Nielsen shopping data.
The survey showed that over a third of all groceries going through the till last month were on promotion or special offer as customers try to cut their household expenses.
More price cuts are expected in the run-up to Christmas, led by Yorkshire supermarkets Asda and Morrisons, which have both promised to spend £1bn each on price cuts over the next three to five years.
Bradford-based Morrisons said it will launch more price cuts and promotions before the all-important festive season.
Morrisons’ chief executive Dalton Philips said the grocery sector faces a tough Christmas and Morrisons needs to ensure customers don’t shop elsewhere.
Last week the group unveiled plans for a new loyalty card that promises to match discounters Aldi and Lidl on price.
Last year Morrisons was caught on the hop by cash-strapped shoppers choosing to stick with Aldi and Lidl over Christmas rather than trade up to Morrisons for their festive shop.
Leeds-based Asda has been leading the way on price cuts and promises to be 10 per cent cheaper than its main rivals or it will reimburse the difference.
Asda’s chief executive Andy Clarke said the price differential between Asda and German discounters Aldi and Lidl is narrower than it has ever been and that some weeks Asda is beating the discounters on a basket of goods.
Aldi and Lidl have made great strides by offering cheap basics whilst also luring in middle class shoppers with luxuries such as quality champagne and lobster at rock bottom prices.
This year Aldi will up its game by offering Beluga caviar at £9.99 for 20 grams in addition to cut price fresh scallops, fresh dressed crab, whole goose, rib of beef, and a five-bird-roast.
Morrisons said it has cut prices on around 2,000 items since launching a price blitz in May.
The group announced plans to slash the price of 1,200 everyday items by up to 60 per cent.
The grocer said prices on popular branded and own-label products will fall by an average of 17 per cent.
Since launching the scheme Mr Philips said that Morrisons’ rivals have upped prices on 2,000 products while Morrisons has raised them on about 300 lines.
According to the latest data, overall food inflation at 0.3 per cent is at its lowest level since the survey started in 2006.
Fresh food inflation was zero in September, the first time in 55 months that prices haven’t risen, driven by price cuts on milk, cheese, eggs and vegetables.
Overall shop prices recorded deflation for the seventeenth consecutive month at -1.8 per cent.
Helen Dickinson, British Retail Consortium director general, said: “The seventeenth consecutive month of deflation is good news for hard-pressed households.
“Retailers are turning their attention to Christmas by reading current conditions and matching consumer sentiment well with their promotions and offers.”