Narrow supermarket profit margins mean cheaper shopping baskets

Data from the research company Kantar Worldpanel has indicated that the average price of a basket of food has dropped by 2.1 per cent over the last year, as a result of the supermarket price war.
Price reductions have been seen in a variety of staple purchases, including bread, butter, eggs and vegetables.
This deflation will have saved the average shopper around £20 in the last three months.
The three months to 26 April have shown that supermarket revenue growth has slowed to 0.2 per cent compared to last year.
This is despite the many cuts the big stores have made to try and preserve their business.
Low prices, price comparison guarantees and money saving deals have all been the forte of Tesco, Morrisons, Asda and Sainsbury’s over the last year, and although this seems to have had a terrible effect on the business of suppliers, it at least has been good news for customers.
Kantar Worldpanel has also reported on the most recent market shares figures. The growth of the German discounters seems to have lost some of their momentum, settling at 5.4 per cent for Aldi, and 3.8 per cent for Lidl, in the 12 weeks to 26 April, it has been reported.
Tesco is still the King at 28.4 per cent, 0.4 per cent lower than the same time last year, whereas Sainsburys have only dropped 0.1 per cent across the year.
Overall the price war could be coming to an end as the profit margins are now incredibly thin and so any more cutting is getting more and more difficult.