Supermarket price war ‘saves shoppers £5/week’

By Michael Stones contact

- Last updated on GMT

Grocery prices have dropped by more than 5% in the past year, revealed the new price tracker
Grocery prices have dropped by more than 5% in the past year, revealed the new price tracker

Related tags: Supermarket price war, Wal-mart

The supermarket price war has saved shoppers up to £5 a week over the past year, according to an independent shopping and comparison website.

An average weekly shopping basket in January 2015 cost £88.13, down by nearly 5.1% compared with the same month of last year, revealed the new mySupermarket Groceries Tracker.

Ceo of mySupermarket.co.uk Gilad Simhony said the results underlined the growing variation in price between brands and own-label. “With a saving of almost a fiver on their weekly shop compared with a year ago, shoppers up and down the UK should be delighted to see a welcome break in one area of their personal finances,”​ said Simhony.

‘Brand and own-brand’

“This is great news for shoppers and demonstrates the impact of the supermarket price war. We still see, however, that items change in price frequently across all of the supermarkets, meaning it is more important than ever to compare prices as the difference between supermarkets as well as brand and own-brand ​[own-label] items can be huge.”

Over the past month, the price of the average shop fell by 2.33% compared with a bill of £90.24 in December 2014.

Claimed to be an industry first, the tracker will cover the same 35 products each month that are the most commonly purchased at supermarkets. It included a total of nearly 5,000 products purchased from Britain’s big four supermarkets – Tesco, Asda, Sainsbury and Morrisons, discount store Aldi, upmarket retailer Waitrose and e-commerce business Ocado.

Cheapest own label prices

  • Frozen products: Morrisons
  • Snacks and sweets: Asda
  • Dairy products, ready meals and fruits and vegetables: Aldi
  • Cereals: Ocado

Tesco, Asda, Sainsbury and Morrisons

The tracker also aimed to reveal that the products that have increased in price the most over the past month and those recording the steepest falls.

Biggest risers over the past month were: branded and own-label cola drinks, up by 3.25%, squash drinks, up by 2.18%, cucumbers up by 2%, and carrots up 1%.

Products that had dropped the most in price were: broccoli, down by 15%, grapes, down by 14.5%, potatoes, down 11.33% and eggs down 7.7%.

All prices include offers but not multi-buy offers. The tracker also excluded items that would disproportionately inflate the price of the weekly shop. Those included products that are: organic, free range, Fairtrade and gluten free.

Prices are an average and cover the whole month. The prices apply to brand and own-label and cover value and regular ranges but not finest/luxury ranges, which are not available at all supermarkets.

Morrisons was the cheapest

The mySupermarket Groceries Tracker also revealed the best supermarket to visit for certain types of own-label groceries. Over the past month, Morrisons was the cheapest for frozen products, Asda was the best for own-label snacks and sweets and Aldi offered best priced dairy products, ready meals and fruits and vegetables. Ocado was said to be the best priced for both baby products and cereals.

The research did not specify whether the lower prices were absorbed by the retailers or passed on to their suppliers. Insolvency specialist Begbies Traynor confirmed earlier this month that the supermarket price war could force more than 100 food firms out of business​.

Meanwhile, the big four supermarkets remained locked in a head-to-head battle on prices with discount stores Aldi and Lidl. While the big four are scaling back the size of their retail estate, Waitrose announced plans to create 2,000 jobs​ in 14 stores nationwide and a new e-commerce grocery distribution hub in south London. 

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1 comment

Morrisons is the cheapest

Posted by roro01,

Supermarkets' problem was caused by them charging high prices at a time of falling consumer real incomes. Morrisons is addressing this problem.

Morrisons has jumped ahead of Aldi to become Britain's cheapest supermarket in the first fully independent audit of prices at the major chains, prepared exclusively for Guardian Money. Aldi was consistently the cheapest throughout 2014 until October, when Morrisons promised to match prices at the German-owned discount chains.

Morrisons has promised a total dividend of 13.65p per share for the current year - a yield of 7.5%. Morrisons dividend is safe as the company is confident it can cut cost by £1b and generate net cash flow of £2b over three years, against a backdrop of falling net debt - already fell from £2.85b to £2.6b in the third quarter and the company expects year-end net debt of £2.3b-£2.4b.

Morrisons is trading just above its tangible net asset book value of 181p per share. The latter implies zero goodwill book value and forecasts of zero profits so a price under 181p per share implies forecasts of losses whereas goodwill at book value = 20p per share and the company is a cash cow still generating hundred of million of pounds of profit each year. The profit guidance for the current year provided by the company in November is £335m - £365m.

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