In rare cases, prices drop. Hellmann’s Real Squeezy Mayonnaise, Chicken and Mushroom Flavored Pot Noodles, and a tube of Pringles Sour Cream and Onion have all gotten cheaper in the past two years.
All chains monitor each other’s prices with surgical precision, 24 hours a day. These days, Aldi sets the tone in the market.
“When they go up, we go up, if they hold [prices]we hold on,” says a supermarket source.
In an effort to stay competitive on basic necessities, Tesco and Sainsbury’s have launched campaigns to match discounter Aldi on price to support households squeezed with the rising cost of living.
They were able to pursue these cuts in part thanks to the recent increase in fuel profits at their service stations, as gasoline and diesel prices soared. Chains have been accused of profiting because they fail to pass the savings on to consumers.
“It gives us the firepower to invest more in food,” says one executive.
Butler, who now advises suppliers, believes some of the shocks from high food inflation could have been avoided if grocers worked more closely with producers.
A short-term solution, he says, is to sell more produce that typically doesn’t meet stringent supermarket standards, such as wonky vegetables and chickens of different sizes.
“If your carrots are 2mm shorter this week because there hasn’t been enough rain, don’t tell the suppliers you don’t want them, the consumer just wants to buy a carrot at the best possible price. “
Another industry view is that Britons should cook more from scratch to reduce their food bills, although it would take a joint effort between grocers and politicians to educate younger generations.
As disposable income declines this fall, retail spending will come under pressure in the last quarter of the year, which will weigh on supermarket profits.
“Despite discounts and value line extensions from retailers, consumers are likely to remain under pressure in the near term as inflationary pressures continue,” said UBS’s Saranja Sivachelvam.
As millions face higher supermarket bills and crippling energy costs this winter, the battle is on for the cheapest grocery cart.