Supermarkets announce more price cuts

LONDON (Reuters): British supermarkets Marks & Spencer and Asda announced more price cuts on Wednesday, adding to the country’s brighter outlook for food inflation.

M&S said it was cutting the prices of 200 food items by an average of 11%, including British beef mince, tuna steaks and Red Leicester cheese.

Supermarket Asda said it had reduced prices on 232 branded and own-label products by an average of 14%, including bread, fresh fruit and vegetables and fresh meat.

Grocery prices remain in the spotlight due to the ongoing squeeze on consumer budgets.

Asda’s monthly Income Tracker showed that more than 60% of UK households saw their disposable incomes fall in August compared to a year earlier, despite a slowdown in the official headline consumer price index inflation rate to 6.7%.

Industry data published on Tuesday showed annual grocery inflation was 11% in the four weeks to Oct. 1, its lowest level in 15 months.

All of the country’s major supermarket groups have cut the prices of essential products in recent months.

Market leader Tesco said last week it had reduced the prices on 2,500 products in its first half and predicted food inflation would continue to fall in the second.

Market researcher Kantar said on Tuesday that Britain’s unusually warm September and October was delaying early sales of Christmas food such as puddings and seasonal biscuits, with volume sales down by 14% and 29% respectively versus the same time last year.

However, M&S said almost 50% of shoppers had started preparing for Christmas, with its Christmas food to order sales up 22% compared to this time last year.

Separate surveys on Tuesday said the warm weather had also put off people from buying autumnal clothing, knitwear and coats.