By James Davey
LONDON (Reuters) -British food retailers Ocado Retail and Sainsbury’s cut more prices on Wednesday, in a further sign that UK food price inflation will continue its downward trajectory and relieve some of the pressure on consumers.
Ocado Retail, a 50/50 online supermarket joint venture between Ocado Group and Marks & Spencer, said it was lowering prices on another 200 items by an average of 8%.
Sainsbury’s, Britain’s second largest grocer, said it had added over 40 products to a scheme that matches the prices of discounter Aldi, taking the total to over 400.
It has also expanded its Nectar Prices loyalty scheme, which offers members lower prices, to frozen foods.
Grocery prices remain in the spotlight as Britons grapple with a cost-of-living crisis stretching into its second year.
UK food price inflation reached its highest since 1977 in March at over 19%. This official measure slowed to 14.9% in July and, while industry data showed it at 12.7% in August, rising food prices remain a major strain on the finances of many households.
Its recent downward movement is being closely watched by consumers, lawmakers and the Bank of England (BoE) as its mulls further rises in interest rates.
Examples of Ocado Retail’s latest round of cuts include a four can pack of Heinz beans reduced to 3.75 pounds ($4.79) from 4 pounds and a pack of Quaker rolled porridge oats reduced to 1.50 pounds from 1.75 pounds. The joint venture cut the prices of 100 items in June.
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Sainsbury’s is now matching Aldi’s price of 65 pence for a 325g tin of own brand sweetcorn, having previously charged 95 pence.
While all British supermarkets, including market leader Tesco, have reduced the prices of some products in recent months, researcher the Institute of Grocery Distribution has said that UK food price inflation will still be around 9% in December.
Retailers have cautioned that further supply chain challenges could add to input costs in the months ahead, including poor UK harvests.
Governments across Europe are battling high inflation. In May, the French government secured a pledge from 75 top food companies to cut prices on hundreds of products, while Hungary’s government has imposed mandatory price cuts.
EXPLAINER-Why is UK food inflation so stubbornly high?
($1 = 0.7829 pounds)
(Reporting by James DaveyEditing by Mark Potter)
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