The latest survey conducted for The Grocer by ESA shows that the average price of the 100-item basket has been driven down by £2.41 in the past year and is now £169.60.
The GPI also reveals that prices have tumbled a further 0.4% in the past month.
Analysts say these latest findings will bear further gloomy tidings for those members of the supplier base who are already feeling the pinch of a strong deflationary trend.
“This will be a great concern for manufacturers and suppliers particularly as energy, packaging and distribution costs are on the increase,” said Nicola Mallard, food manufacturing analyst at Investec.
A number of factors are driving the fall in prices, with the pressure exerted by Tesco and Asda chief among them, added Mallard. Meanwhile, efforts by Sainsbury and Morrisons to refocus their price-cutting initiatives in line with their competitors have also had a significant impact.
Seasonality and promotional activity were further deflationary influences, said David Hallam, food and drink industry analyst at Williams de Broë. “The supermarkets’ pressure on manufacturers has been particularly strong of late, with profits being squeezed even more as we enter the critical Christmas trading period.”
Alcohol and fresh produce in particular are bearing the brunt of many of these seasonal price-cutting initiatives.
The Grocer Price Index tracks the prices of 100 commonly bought grocery items stocked by the big four multiples. Pricing data is collected by ESA, which compiles an industry average basket price, allowing The Grocer to monitor price fluctuations.