Grocery bills have fallen after an initial rise at the peak of the Covid-19 crisis as a supermarket price war takes hold.
Prices have dropped through the summer after a 2.5pc rise in inflation in the first month of the nationwide lockdown.
By the first week of August, the price of groceries was around 0.5pc higher than it was at the beginning of the year, the Institute for Fiscal Studies said.
An increase in promotions, such as 20pc off certain items or similar, has led to prices gradually returning to normal levels.
The findings come after Tesco discounted hundreds of products exclusively for members of its Clubcard loyalty scheme last month, and expanded its Aldi price-matching campaign.
Aldi’s UK boss Giles Hurley accused Tesco of deploying marketing tricks and gimmicks.
He said that when you shop at Aldi “you don’t have to pay upfront, you don't have to join a club” and that makes the German discounter unique.
Morrisons also said it was investing in prices as more families could find themselves out of work as the furlough scheme comes to an end .
Supermarket chains typically resist passing on costs to shoppers if they can help it.
In the first month of lockdown, the share of grocery spending online was 20pc higher than for the same period in 2019. By the beginning of August, the increase compared with 2019 was nearly 70pc, the IFS added.
Martin O'Connell, deputy research director at IFS, warned however that as cases of coronavirus are on the up and restrictions are reintroduced , another bout of price increases could follow.
Separately, footfall around physical stores will not return to 2019 levels in 2021, another report warned, leading to even more closures on the high street.
Some firms that emerge from administrations will turn into zombie companies amid a slowdown in consumer spending, according to the Economist Intelligence Unit.
The outlook for retail employment remains dim as new jobs in warehousing and delivery services fail to offset the loss of jobs in physical retail.
- MLBPA should seek a higher minimum salary
- The true cost of Cuban players
- High costs of Olympics deterring bids from potential 2022 host cities
- Sainsbury's and Asda in merger talks
- The Kris Bryant breakeven point for the Chicago Cubs
- The playoff team you could’ve built for absolutely nothing
- Yes, the Phillies should have traded Cole Hamels
- What’s really behind MLB’s salary inflation?
- After latest blunder, what should Dodgers do with Ramirez?
- Who are the Muslim Brotherhood?
- Red Sox shouldn’t trade Mookie Betts
- Bulletproof Coffee: Debunking the Hot Buttered Hype
- What led to downfall of Red Sox GM?
- As teams prepare to throw around big money, how wary should they be of big-money, long-term deals?
- Thomas Cook is saved – after the short-sellers take a profit
- Yoan Moncada: The next big (and expensive) Cuban slugger
- Johnny Cueto or Cole Hamels: The deadline decision
- A three-way swap for Red Sox, Mariners, Nationals
- Brewers: Sorting out the mess in Milwaukee
- Tottenham meet Arsenal in the biggest North London derby ever
Supermarket price war wipes out higher grocery costs from lockdown have 494 words, post on www.telegraph.co.uk at October 21, 2020. This is cached page on Europe Breaking News. If you want remove this page, please contact us.