Low food inflation hits sales

Food and drink sales have reached a new low in August.

Research by the British Retail Consortium (BRC) has revealed that sales of food have declined 1.6% over the past three months, with a flat growth of 0.1% over the past 12 months. This is a record low three-month average decline.

Retail experts have expressed concern about the position of the big four supermarkets and the ongoing price war on the shelves.

David McCorquodale, head of retail at KPMG said: “The food sector remains in a state of disruption with the share of the 'big four' being challenged on many fronts after a 15-year reign. The like for like decline shows the battle is being fought via prices on the shelves, but the war may be won by those grocers best able to adhere to brand values to retain customer loyalty.”

Analysts have pointed out the effect low inflation is having on food sales, as people are seeking out cheaper prices.

Joanne Denney-Finch, chief executive at IGD said: “Although August food and drink sales were at least up on July, retailers are still contending with three well-established trends.

“Food inflation is extremely low, more people are eating out and shoppers are visiting more food stores to pick the best value from each.

“Our ShopperVista research shows that 47% of shoppers say they have recently visited two or more grocery stores on the same trip, up from 42% last year. Also, 58% told us they often change their meal plans to fit what’s on promotion.”

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