Food price war will reduce food bills

Fri, 25 Nov 2005
 
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Experts are predicting a fierce supermarket price war next year. This could lead to £1.7 billion being cut off grocery bills.

Major supermarket chains will start discounting their products in a bid to offer the best value for money in this cut-throat market.

Such competition between rival stores can only be good news for customers who make big savings on their weekly food bills.

The survey carried out by research company Verdict, estimates that the cost of grocery items will fall by 0.6 per cent the following year. It is cheaper to buy food now than it was three years ago.

The cause of this current battle of the big stores is believed to be the takeover last year of Safeway by Morrisons’.

Sainsbury’s and Tesco have since been trying to attract disgruntled customers by cutting prices. However research has shown that Morrisons’ hasn’t done too badly since the takeover, they have actually won over some of Asda’s customers.

With some businesses winning, some will have to loose. The losers this time will be smaller grocery stores such as corner shops, who struggle at the best of times against the might of the supermarkets.

The grocery market in Britain has grown in value from £110.4 billion four years ago to £134.8 billion. This has been mainly due to supermarkets increasing their range of non-food products such as clothing and electrical goods.

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