Most of the UK's major supermarkets have cut the price of milk in a bid to attract budget-conscious shoppers into their stores.
Tesco kicked the price war off on Wednesday by reducing the cost of all sizes of milk. The move was followed by Sainsbury's the next day, with Aldi, Lidl and Asda joining in today All stores are charging £1.55 for four pints, £1.25 for two pints, 90p for one pint and £2.30 for the largest six-pint bottle.
Some analysts have suggested the cuts might signal that grocery prices could finally start to come down after last month's Office for National Statistics news that food and non-alcoholic drinks prices increased by 18.3% on a yearly basis, according to The Mirror.
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It comes as Consumer Price Index (CPI) inflation - which measures the change in the price of goods and services over time - remains in double-digit figures and now stands at 10.4%.
Laith Khalaf, head of investment analysis at AJ Bell in Bristol, told the BBC that the price cuts are "some light at the end of the inflationary tunnel for consumers". "It also suggests that the UK's fiercely competitive supermarket sector isn't simply going to cash in on profits as wholesale costs fall, because there's always a competitor waiting in the wings to do some undercutting," he said.
Richard Hunter, head of markets at Interactive Investor, told the Daily Mail that the supermarket price war had been underway "for a considerable amount of time". "In the current environment basement prices have become extremely important to the cost-pressured consumer," he said. "The reduction in milk prices will be a welcome development, but with food inflation overall still around 17%, upward pressure on prices are very much intact."
Tesco UK chief executive Jason Tarry said: “Milk is a key everyday staple for so many families. We’ve seen some cost price deflation for milk across the market in recent times, and we want to take this opportunity to pass that reduction on to customers. This will not affect the price we pay our farmers.”
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