UK food prices fell at their fastest rate of the year in September as the supermarket price war continued to drive down the cost of goods.

Prices across the big four supermarkets fell at a new record rate of -0.87% year on year during the month to 1 October, according to The Grocer Price Index (GPI) collated by Brand View. The overall rate of deflation topped the previous high of -0.66% recorded in the month to 1 August.

The figures mark the fifth consecutive month the GPI has recorded food price deflation, with all of the big four (and Waitrose ) charging lower prices than a year ago.

Having lagged behind its big four rivals in previous editions of the GPI, Tesco recorded the highest rate of overall annual price deflation last month. Tesco prices fell by an average of 1.24% year on year, having fallen by just 0.08% over the month to 1 September.

Tesco prices were more than 4% lower in fruit and veg than a year ago, and almost 5% lower for dry grocery goods.

Morrisons and Asda continued their trend of falling prices, recording year-on-year deflation of 1.08% and 0.97% respectively over the month.

Big four inflation

Big 4 inflation: click to enlarge

While Sainsbury ’s also showed lower prices, its 0.13% rate of average annual deflation was its lowest since the month to 1 April and significantly down on the 0.82% year-on-year deflation it saw for the month to 1 September.

Sainsbury’s was also the only supermarket to see month-on-month price rises - with average prices up 0.84% since August. The figure was driven by price increases in meat , fish & poultry (+3.15%) and bakery (+4.13%).

The Sainsbury’s figures do not yet fully take into account changes to Brand Match, which will now compare prices solely against Asda, and its general pricing strategy overhaul announced in late September.

Across grocery, however, it is clear the mults’ investment in price is having an impact.

Almost every category included in the GPI showed lower prices year on year, with the notable exception of baby goods, which were up 7.98% largely because shelf price reductions have been replaced by multibuy offers. The most significant overall deflation was in fruit and veg at -3.75%, following the early summer peak of -4.83%.

Other products to see significantly lower prices include soft drinks (-2.83%), bakery (-2.17%) and dry grocery (-2.01%).

Waitrose, which is not included in the GPI average, saw its prices fall by 1.12% last month, less than during the ­previous two months.