A backdrop of falling food prices across the country has led supermarket Morrisons to slash prices on nearly 160 meat, fruit and vegetable products by an average of 12%.
This is the latest round of their Price Crunch campaign, which has already seen cuts of an average of 18% of more than 1000 products last month, which included toiletries and seasonal fruits and vegetables. Some items were reduced by up to 56%.
These cuts will be reassuring for households and for the financial sector, who have worried that the Brexit vote will cause inflation to rise as imports become more expensive.
In the four weeks leading up to the 17th July, sales in the supermarket industry fell by 1.1%, the worst performance for at least 2 years, but analysts blamed the performance on damp summer weather compared with the same time last year, rather than a Brexit-related fall.
All of the ‘big four’ grocery chains – Tesco, Sainsbury’s, Asda, and Morrisons – suffered a decline in their sales in the period. However, food retailers believe that inflation issues on their prices will not come until the autumn, when fresh UK-grown food is less available, and they are forced to buy in food from abroad.
Manufacturing sectors have already been feeling the effects of the weaker pound, as although exports have increased, so have the material costs.
So far, Morrisons have cut prices on 4,435 products as they fight back in the so-called ‘price wars’ between supermarkets, particularly against Aldi and Lidl, which have been rapidly increasing their market share in the UK. Sainsbury’s and Tesco have also been cutting prices in a bid to retain customers seeking a bargain.
Industry analysts have also suggested that Walmart-owned Asda could be planning major price cuts, but the supermarket have stated that it remains “committed to the previously announced five-year £1.5bn price investment.”