>>THE ISSUES THAT MATTER, FROM THE PEOPLE INVOLVED
We have explored the theme of deflation in the grocery market quite a lot over the past two years or so. But while The Grocer has recognised that there is definitely an issue here, and that it remains the biggest challenge for both suppliers and retailers, we have always felt that, aside from The Grocer 33, there was a lack of data that would help us identify exactly what was happening to prices in the grocery market.
Well, we plan to change all that! This week, we have unveiled a new initiative dubbed The Grocer Price Index. The idea is simple: we are tracking the prices of 100 commonly bought grocery items sold in the big four supermarket chains. Each month we will be able to use the results of this survey to assess whether prices are moving upwards or downwards on a monthly basis - and on a six-month basis. But as with The Grocer 33 survey, we see The GPI as a long-term venture. So, as we build up more information in our databank, we will be able to assess how prices have changed year-on-year too.
We think this new feature will be invaluable to everybody in the market. It’s independent. It’s based on sound methodology. And it’s being put together by a reliable and trusted partner of both retailers and suppliers - The Grocer. So we hope that you will find it a useful business tool.
But I am not promising that The GPI will make for happy reading. As you can see on page 27, in the first six months under review, prices fell by 0.6%. And if it had not been for some seasonal hikes on fresh produce and the like between November and December, the fall in prices would have been even greater.
No doubt many suppliers will read those sorts of figures and want to weep, because they know that prices are going to come under renewed pressure in the weeks and months ahead. I say that because we are starting the run into what is undoubtedly one of the most crucial Christmas trading periods for years. You do not need to look too hard to find evidence of how intense the competition is getting: just read our story on page five about the price of Stella Artois hitting an all-time low this week.
And I fear that as we enter the new year, The GPI will continue to reflect such deflationary pressures.
read ’em and weep