Blackfriar: And the winner in the store wars is... the consumer

As a result, shoppers have saved £400m over the past 12 weeks, which equates to a saving of £15.15 per household.

​As prices fall, shoppers are finding themselves better off each month and are typically treating themselves to trips to the cinema, meals out and treats for the kids.

Lower prices on bread, milk, eggs, vegetables and meat are all contributing to a feelgood factor that analysts expect to continue.

As Clive Black at Shore Capital said: “What the latest Kantar data suggests to us is that the UK grocery segment is bottoming out and potentially ‎positioning itself for, dare we say it, better times ahead.”

Tesco is the clear winner at the moment, which has hit number two player Asda. The Leeds-based grocer is paying the price of Tesco’s recovery with its worst sales performance in more than 20 years as Tesco wins back shoppers by slashing prices.

Asda has benefited from Tesco’s slump over the past few years, but a renaissance under new boss Dave Lewis led to Tesco’s best performance in 18 months.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Asda is really in the firing line from Tesco.

“85 per cent of Asda shoppers went to Tesco in the last 12 weeks. It’s not that Asda is doing anything wrong, it’s Tesco coming back.”

Last month Asda reported its first fall in underlying annual sales since the financial crisis struck in 2008 and blamed the decline on short-term gimmicks by “struggling” rivals.

The firm’s chief executive Andy Clarke said that if rivals’ vouchering was taken out of the equation, the group would have seen positive like-for-like sales and he accused his rivals of “giving away £10 notes for £9”.

However, it appears that Asda has some tricks up its sleeve with further price cuts.

“Asda is famous for doing round pound pricing, but in recent weeks products haven’t been £1, they have been 95p. We are yet to see the effect,” said Mr McKevitt.

Today, all eyes will be on Morrisons as the beleaguered group announces its annual results.

​It is expected to report its lowest annual profit in eight years and scrap plans to launch 100 convenience shops a year as it focuses on restoring the core supermarket chain to health.

​It will also announce a big cut to its future dividend payments to fund expenditure on its main stores, which have lost customers to discounters Aldi and Lidl.

Analysts are predicting pre-tax profits of £342m for the year to February 1.

This is less than half the £785m profit made in 2013-14 and a third straight year of decline.

However, it is hoped that a new management team, formed of a triumvirate of Tesco veterans – David Potts, Andy Higginson and Trevor Strain – will transform the group’s fortunes.

New chairman Mr Higginson has ​warned​ that getting Morrisons back to robust health will take three to five years.

“There’s a lot of customers out there who would love to be shopping in Morrisons, but can’t at the moment because we’re not doing a good enough job,” he said.

“If we improve the work we do for them they’ll come back.”

Analysts agree that if anyone can turn Morrisons around, it is the Tesco triumvirate led by new chief executive David Potts, who starts work on Monday.

“Mr Potts is a highly experienced, intelligent and driven individual that we expect to grab Morrisons by the horns,” said Clive Black at Shore Capital.

Former chairman Sir Ken Morrison has given Mr Potts’ appointment his blessing, saying that the group needs to return to the old standards that have been lost in the last few years.

With their combined time at Tesco during its heyday, the triumvirate should know how to do this better than anyone.