The level of supermarket price cuts is increasing once more after three months of more modest deflationary figures.
The annual rate of grocery deflation reached -2.2% in the month to 1 August, according to The Grocer Price Index, having been at -1.9% in the previous month.
The GPI, calculated by Brand View from analysis of over 60,000 items across the big four, last month recorded its joint second-highest level of annual deflation since the beginning of last year’s price war, only beaten by the -2.5% recorded in the month to 1 April.
The uptick in deflation this month comes after three months in which annual prices fell by less than 2%.
This month, in the period to 1 August, every one of the 14 categories tracked by the GPI saw falling prices year on year.
The main drivers of increased deflation were bakery (-4%), deli (-3.3%) and meat, fish & poultry (-3.5%). Only fruit and veg (-0.9%) and baby goods (-0.96%) saw price cuts of less than 1%.
Morrisons took over from Sainsbury’s during the period as the supermarket to have seen the largest year-on-year price falls. It recorded annual deflation of 3.3% across its product range, while Tesco saw prices fall 3.1% and Sainsbury’s 2.6%.
As was the case last month, Asda was the only one of the big four to see price increases, with inflation of 0.4%.
However, all four supermarkets recorded a lower rate of price inflation than they did in the month to 1 July. The GPI has now recorded falling prices across the big four for over a year, with the last monthly positive inflation seen in the month to 1 May 2014, at 0.2%.
Waitrose, not included in the GPI figure itself, saw annual price inflation of 0.5% this month, which was an increase from the 0.1% recorded in the previous month.
Over the past year, the GPI has recorded annual deflation of 1.6%, with Morrisons recording the largest average price falls over that time. Over the past 12 months, Morrisons has seen prices fall on average by 2.2% a month, followed by Sainsbury’s (1.9%), Tesco (1.7%) and Asda (0.8%).
Each of the big four’s prices also fell on a month-on-month basis in the month to 1 August, but Morrisons saw significantly bigger price movement at -4.4% compared with the -1.0% at Tesco, -0.9% at Asda and -0.3% at Sainsbury’s.
The big four’s 0.7% month-on-month price fall was driven by a 3% fall in the price of household goods and 2.2% fall in baby goods. Seven of the 14 categories actually saw a monthly price increase, led by a 1.8% rise in dairy prices and a 1% rise for health and beauty goods.
Morrisons’ big monthly fall comes despite a big jump (over 46%) in fruit & veg prices month on month, which is primarily related to an increase in the product count being analysed in the category.
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