Food Prices Fall Sharply As Supermarkets Step Up Price War

[Sancho Panza]

Telgraph 4/2/15

'Food prices fell at the steepest rate in at least eight years in January, as supermarkets stepped-up a discounting war and commodity prices continued to fall.

Meat, milk, vegetables and eggs were all cheaper in January compared with a year ago, according to the British Retail Consortium (BRC). Bread and cereals prices also fell, as bumper harvests pushed down grain prices.

This helped to drive a 0.5pc decline in overall food costs, following a rise of 0.1pc in December. January's decline is the steepest decline since records began in December 2006.

^{Shop prices have fallen for 21 straight months (Source: BRC)}

Cheaper food costs pushed down overall shop prices by 1.3pc in November, following a fall of 1.7pc in December. The BRC said deep discounting in the run-up to Christmas meant a "significant amount of goods were sold at full price in January" as some retailers pulled new season stock forward.

Shop prices have now fallen for 21 consecutive months. Helen Dickenson, director general of the BRC, said the full impact of tumbling oil prices, which have fallen from $115 (£77) a barrel last summer to $56 today, was not yet reflected in prices on the high street.

Ms Dickenson said falling costs across the supply chain meant 2015 was "shaping up to be win-win year for shoppers and retailers alike.” .

“With the outlook for inflation low, the jobs market robust and rising real incomes gathering pace, the outlook for consumer spending looks positive. Deflation doesn’t always translate into bad news for retailers. Retail businesses will continue to see decreases in their own input costs for the foreseeable future."

The BRC said deflation in the wider economy was "all but certain" in the coming months as energy bills and petrol prices continue to come down.

Inflation, as measured by the consumer prices index (CPI) fell to 0.5pc in December, according to official data. The Centre for Economics and Business Research believes Britain will slip into deflation in March, with consumer prices predicted to fall by 0.3pc.'

Telegraph 4/2/15

'Aldi is to open more than 70 new stores and recruit almost 5,000 staff this year as it ramps up its competition to take on the established “Big Four” supermarkets.

The discount retailer’s store opening plan will add to its current 560 outlets in Britain, pushing its portfolio of stores past 600.

This attitude has helped Aldi take a 4.8pc market share of British consumers’ grocery shopping, according to the latest data from Kantar Worldpanel, up 20pc on the same period a year before. Lidl had 3.5pc of the market, up from 3.1pc.

In its attempt to attract the best staff to maintain its assault on the competition, Aldi is offering store managers salaries starting at £35,800 and rising to £56,500. The company has also been rated as one of the UK’s top graduate employers.'

Edited February 4, 2015 by Sancho Panza

[TheCountOfNowhere]

Well done to Aldi.

The germans finally invaded main land britiain and it's actually a good thing

[Killer Bunny]

God I hate deflation. Said noone ever, when they understand it.

[Agentimmo]

Lower food prices?

Surely people will put off buying their bread and sunday joints , as they'll be cheaper next week ?

The evils of deflation.....

[Ash4781]

I don't think Sainsburys are cutting prices. I went into one the other day and the prices. Ouch. The store was deserted.

On the 1YR share price looking at -20% https://uk.finance.yahoo.com/echarts?s=SBRY.L#symbol=SBRY.L;range=1y

I think Tesco is marginally worse on the share price performance on the 1year.

[Shrink Proof]

Lower food prices?

Surely people will put off buying their bread and sunday joints , as they'll be cheaper next week ?

The evils of deflation.....

Yes, know what you mean. I've been putting off buying any petrol for ages now as it will always be cheaper next week.

Getting a bit fed up of walking everywhere though...

[winkie]

25kg potatoes £7.....food can be as expensive as you want it or as cheap as you want it...want everything fresh, thought for you, done and made for you, pay more...think, plan, do it yourself save massive..time,thought and deed saves money...your choice.

[billybong]

The BRC said deflation in the wider economy was "all but certain" in the coming months as energy bills and petrol prices continue to come down.

..

The Centre for Economics and Business Research believes Britain will slip into deflation in March, with consumer prices predicted to fall by 0.3pc.

The energy companies being particularly stalwart in their defence of the UK economy in the fight against deflation by keeping the domestic energy prices right up during most of this winter. Edited February 4, 2015 by billybong

[katchytitle]

Unless you can use the time you saved paying someone to do these things to generate more economic profit e.g a coder building a system or a salesman selling a deal

Your time is worth something. How much it's worth is dependent on what you think you can achieve. People with capital simply swap it for other people's time in order to make more capital.

[R K]

Bread and cereals prices also fell, as bumper harvests pushed down grain prices.

[pipllman]

Both Lidl and Aldi are also expanding in Spain - with some success

In La Cala (small town on the coast between malaga and marbella) there is a Supersol (ok, been there for ever), Mercadona (good, just a few years old), Lidl (good, been there about a year), Aldi being built right now

[Wurzel Of Highbridge]

All BS quite frankly. Some stuff I buy is more expensive than ever before.

Check out the graph at the bottom of this link:

http://www.mysupermarket.co.uk/asda-compare-prices/Cat_Food/Whiskas_Temptations_with_Chicken_And_Cheese_60g.html

http://www.mysupermarket.co.uk/asda-compare-prices/Cat_Food/Dreamies_Cat_Treats_Mix_with_Delicious_Cheese_And_Tempting_Beef_60g.html

http://www.mysupermarket.co.uk/asda-compare-prices/Cat_Food/Felix_As_Good_as_it_Looks_Doubly_Delicious_Meat_in_Jelly_Pouch_12x100g.html

Maybe ASDA is starting to take the piss, but all of these cat food items are at record high prices.

I reckon were being lied to again and all this deflation is simple propaganda.

Excluding petrol, exactly what is cheaper?

Edited February 4, 2015 by Wurzel Of Highbridge

[Trampa501]

I don't think Sainsburys are cutting prices. I went into one the other day and the prices. Ouch. The store was deserted.

On the 1YR share price looking at -20% https://uk.finance.yahoo.com/echarts?s=SBRY.L#symbol=SBRY.L;range=1y

I think Tesco is marginally worse on the share price performance on the 1year.

After seeing how packed the local Aldi gets on a regular basis, I can see either T or S going under.

[Wurzel Of Highbridge]

From a general observation Tesco seem to be cheaper than ASDA at the moment.

We went in sainsburys for the first time in months, nice selection of goods at sensible prices.

Still buying the day-to-day stuff in LIDL as they don;t shaft me by fluctuating the price 10 times per week.

[longtomsilver]

After seeing how packed the local Aldi gets on a regular basis, I can see either T or S going under.

I was in the car park of my local Sainsbury's supermarket last week and I saw two cars both with five occupants in each vehicle. After seeing how packed the VW Up was compared to the Range Rover Evoque I can see JLR going under. :bangsheadagainstbrickwall:

[longtomsilver]

I was in the car park of my local Sainsbury's supermarket last week and I saw two cars both with five occupants in each vehicle. After seeing how packed the VW Up was compared to the Range Rover Evoque I can see JLR going under. :bangsheadagainstbrickwall:

*edit

You are comparing apples to oranges. The budget markets operate a different model to the big 4 i.e. working from a physical footprint 1/6th the size so of course it's going to seem more successful, Sainsbury's has never been packed to the girders it's not how they do business. The proof is in the pudding and Sainsbury's market share is quadruple that of Aldi (16% to 4%). Aldi could in theory double it's number of stores but I don't foresee their market share increasing by the same magnitude (maybe 6%) and if Sainsbury's lose 2% of their price conscious/sensitive shoppers then tbh it's no great loss to me (as a holder of 10,000 shares at an average price of 228p taking into account the recent 5p divi).

We all have a stake in Sainsbury's be it directly as employers, shareholders or within larger pension funds so let's not wish it's downfall.

[Sancho Panza]

*edit

You are comparing apples to oranges. The budget markets operate a different model to the big 4 i.e. working from a physical footprint 1/6th the size so of course it's going to seem more successful, Sainsbury's has never been packed to the girders it's not how they do business. The proof is in the pudding and Sainsbury's market share is quadruple that of Aldi (16% to 4%). Aldi could in theory double it's number of stores but I don't foresee their market share increasing by the same magnitude (maybe 6%) and if Sainsbury's lose 2% of their price conscious/sensitive shoppers then tbh it's no great loss to me (as a holder of 10,000 shares at an average price of 228p taking into account the recent 5p divi).

We all have a stake in Sainsbury's be it directly as employers, shareholders or within larger pension funds so let's not wish it's downfall.

'The victory of hope over experience.'

Edit to add:cost concious(in fact,any) shoppers drive revenues and revenues drive supplier discounts/economies of scale.Sneer at them at your peril.

Edited February 5, 2015 by Sancho Panza

[Steppenpig]

The budget markets operate a different model to the big 4 i.e. working from a physical footprint 1/6th the size so of course it's going to seem more successful, Sainsbury's has never been packed to the girders it's not how they do business. The proof is in the pudding and Sainsbury's market share is quadruple that of Aldi (16% to 4%). Aldi could in theory double it's number of stores but I don't foresee their market share increasing by the same magnitude (maybe 6%)...

Prsumably that was the attitude of the traditional German supermarket chains 30 years ago. Edited February 5, 2015 by Steppenpig

[winkie]

The big four have shareholders, pensions and rich executives to pay......both aldi and lidl are private family businesses...they can pass better bigger savings onto their customers.

[cock-eyed octopus]

Sodding Tescos have upped apricot prices by 70%. Bastards. Aldi here I come.

[Hail the Tripod]

Are the price falls partly because they've found a way of pumping more air and water into the food? Whenever I buy bacon from a supermarket it seems to shrink even more. These days it shrinks down to about a quarter of its "in the pack" size. Bacon from the butchers shrinks a little bit, but supermarket bacon disappears like a magic trick.

[TheCountOfNowhere]

Sodding Tescos have upped apricot prices by 70%. Bastards. Aldi here I come.

Was in tesco last night.

They were advertising a slow cooker at half price £16.

They were selling them for £12 2 years ago!!!!!!

Too many 3/2 deals too.

And for those reason, I'm shopping at Aldi ( and Sainsburys cause they are empty ).

[crashmonitor]

One of our major purchases leapt in price yesterday, UHT milk one litre, from 49p to 65p.

I think Tesco are trying to pass on their supposed price cuts on branded stuff, which we never buy anyway, onto their value range.

Our rolling annual grocery bill still came out lower than it has done for a few years in the year to March. But not if Tesco are starting to have a laugh at customers expense. Will have to crate up on the UHT at Lidl from now on.

[SarahBell]

All BS quite frankly. Some stuff I buy is more expensive than ever before.

Excluding petrol, exactly what is cheaper?

Petrol is about 5p a L dearer than a month ago isn't it?

[winkie]

Petrol is about 5p a L dearer than a month ago isn't it?

.....yes sure is......shame no longer worth driving there to shop there....