U.K. food sales by value dropped the most in at least 5 1/2 years in the three months through July because of price cuts by supermarkets, the British Retail Consortium said.
Food sales at stores open at least 12 months plunged 3.5% from a year earlier, the London-based trade group said today in a report compiled with KPMG LLP. That’s the biggest since the series began in December 2008.
Continued aggressive discounting by Britain’s supermarket chains may help support consumer spending at a time of record-low wage growth. The Bank of England may revise its pay forecasts in its Inflation Report tomorrow, which Governor Mark Carney will release at a press conference in London.
“Prolonged discounting campaigns may be good news for consumers, but must be being felt deeply by the retailers,” said David McCorquodale at KPMG. “It’s likely these price wars are here to stay for the foreseeable future.”
The pound fell 0.1 percent against the dollar to $1.6768 at 9:50 a.m. in London.
While food sales decreased in the three months through July, total sales increased 1.3 percent, driven mainly by home and furniture spending. The increase was below the twelve-month average of 2.3 percent. In July, total sales rose an annual 1.3 percent.