Yesterday’s villains have a habit of becoming today’s heroes. Not long ago the big supermarket chains were portrayed as the incarnation of nasty capitalism. They made “rip-off” profits, bullied small suppliers, drove farmers out of business, devastated the high street and promoted unhealthy foods.

“Players can only grow by taking volume from others”

Now the wheel has come full circle. Writing in the Daily Mail, ironically an organ that has over the years spewed out buckets of anti-supermarket vitriol, Dominic Lawson recently described said chains as the best anti-inflationary force we have. He notes, as did the Competition Commission, that “over a long period they have been instrumental in reducing the British cost of living” and that the current round of vigorous price-cutting is of “tremendous social and psychological importance”.

The anti-supermarket brigade will doubtless claim that these periodic price wars are all smoke and mirrors aimed at fooling shoppers into believing that they are getting a bargain when they aren’t. The reality, however, is that the grocery market is now mature with future growth reliant on food price inflation. Consequently, one player can only grow by taking volume from others, especially now that serial discounters are in the ascendant.

So the current, essentially defensive price war is being fought by weakened warriors. Morrisons appears to have triggered the conflict as a last, desperate attempt to revive its flagging sales but lacks the scale economies to sustain the battle against Tesco and Asda. Sainsbury’s is normally a loser in any price war and has already seen its much-vaunted sales growth run out of puff. Waitrose may be able to hold its premium position, but the Co-op is obviously vulnerable. Its sole remaining claim to distinction - ethical trading - has in varying degrees been copied by its rivals and, other than physical convenience, there is little reason to shop there.

From the viewpoint of the participants, this price war is pure folly. Nor will it do much to reduce the cost of living. As Lawson reminds us, food now represents on average only 10% of family spending. Those whom the gods wish to destroy, they first make mad.

Kevin Hawkins is an independent retail consultant

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