Good news on the price war frontline

THE cost of a basket of groceries increased slightly in December, but was still 3% less than the year before, a new survey has revealed.

A basket of 35 popular grocery items cost £83.33 last month, up from £83.18 in November, according to monthly figures from comparison website mySupermarket.co.uk.

Fresh items such as carrots, up 9%, bananas (8%) and grapes (4%) saw the biggest price increases in December.

But frozen favourites such as fish fingers were also up 4% and frozen chips increased by 2% compared with November.

However, the cost of mushrooms fell 14%, ending a continuous increase throughout 2016, including a 36% hike between August and November.

The cost of apples fell 6% in December, as did cola (3%) and frozen pizza (2%).

Overall the same basket of goods cost £2.56, or 3%, more in January last year than in December.

MySupermarket chief executive Gilad Simhony said falling prices were likely to continue into 2017. He said: “It’s been an interesting year all round for UK markets, but following the cost of an average basket of groceries over 2016 has given us some insight into the effects of Brexit and inflation on the UK shopper.

“Despite a rise in December, our basket costs less in December compared to January and shows how the highly competitive price wars between retailers has helped protect shoppers from any subsequent rises caused by current affairs.”

However, non-food prices are showing the first signs of an upward trend as deflation eased in December and the cost of clothing and footwear increased.

Overall, shop prices were down 1.4% in December on the same time last year, an easing from 1.7% in the previous two months, according to the BRC-Nielsen Shop Price Index.

However, the majority of categories monitored saw month-on-month increases in prices, with clothing and footwear seeing month-on-month inflation for the first time in nearly two years.

Mike Watkins, head of retailer and business i nsight at Nielsen, said: “Consumer demand has been increasingly difficult to predict and retailers continued to hold back on increases in December to ensure a strong year-end.

“However, we are seeing the impact of the currency depreciation of the last six months, with increases in retail prices for some non-foods such as clothing.”

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