Food prices dip for first time in eight years amid price war

Retailers have reported a modest fall in the cost of food in the year to November, the first time prices have dipped since 2006.

Supermarket shopping: food prices dipped in the year to November
Supermarket shopping: food prices dipped in the year to November

According to the British Retail Consortium, food prices dropped by 0.2% – the first fall since the BRC started collecting price data.

Helen Dickinson, BRC's director general, said overall shop prices, including non-food, had also reduced, falling 1.9% compared to the same period in 2013.

She said with the "first real rise" in incomes for more than five years and a recovering labour market, the outlook for retailers looked positive. 

"We’re seeing the big supermarkets investing in price cuts worth millions of pounds during a hugely competitive period in the food market," she said.

"With food prices down, wages up, a highly competitive market keeping inflation low and Christmas around the corner, there are plenty of good reasons to assume a strong trading period lies just head of us".

However the head of retailer and business insight at Nielsen warned retailers were facing a slow start to the Christmas trading period with high street footfall reliant on deep discounting and promotions.

As a result, "savvy" Christmas shoppers could expect very competitive prices from food retailers over the festive season as they compete to win customers over the crucial trading period.

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