Bosses at Tesco, Sainsbury's, Asda and Morrisons will be grilled by MPs on Tuesday as their food prices rise while wholesale costs are dropping.
Senior executives from the huge supermarket chains will appear in front of the Business and Trade Committee to discuss food price inflation, as retailers are under increasing pressure to hand down savings they are seeing on wholesale items to consumers, who have faced punishing food price inflation in recent months.
Data from the BRC-NielsenIQ Shop Price Index suggested retailers are beginning to pass on lower wholesale costs, with food inflation easing for a second month running as supermarkets cut the price of household staples.
READ MORE: Boy, 9, had 'multiple operations' after freak zorb ball accident
Food inflation decelerated to 14.6% in June, a relatively significant drop from May's 15.4% and below the three-month average of 15.2%. Fresh food inflation saw a significant slowing from May's 17.2% to 15.7% as retailers dropped the prices of staples including milk, cheese and eggs.
But food price inflation needs to fall substantially further to help rein in higher than expected overall UK inflation, which is still running at 8.7%. The Bank of England last week lifted interest rates to 5% with a bigger than expected 50 basis point hike to try to tame rising prices.
The Bank suggested that some retailers were jacking up prices or failing to pass on lower costs to consumers as a way of increasing their profit margins at a time of stubborn inflation.
Chancellor Jeremy Hunt is to meet the Competition and Markets Authority (CMA) and the watchdogs for the energy, water and communications sectors on Wednesday to ask whether there is a profiteering problem in their sectors and what they are doing about it.
Ministers are also talking to the food industry about "potential measures to ease the pressure on consumers", Mr Hunt has confirmed.
Receive newsletters with the latest news, sport and what's on updates from the Liverpool ECHO by signing up here
