Dip in food sales signals continuation of price wars

Food sales have experienced the deepest three-month average decline since 2008 according to the British Retail Consortium (BRC).

The BRC reported a 3.5% decline in food sales for the last three months to July, compared with overall retail sales, which were down 0.3% on a like-for-like basis from July 2013. The BRC said this record low meant the supermarket price war is here to stay for the foreseeable future.

Non-food sales increased 3.4% over the first quarter in what the BRC has called a polarisation between food and non-food retailers.

Helen Dickinson, director general, BRC said the decline would be felt by retailers: The grocers figures continue to make for gloomy reading for the sector. The impact of their prolonged discounting campaigns may be good news for consumers, but must be being felt deeply by the retailers given like-for-like sales have fallen in value every month for the last 12 months, save for April when Easter helped sales. The headache for the grocer investor is the tonic for the consumer: its likely these price wars are here to stay for the foreseeable future.

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