Despite their competitor-bashing, supplier-squeezing and supposed consumer-benefiting nature, price wars are beginning to lose their appeal.

Despite their competitor-bashing, supplier-squeezing and supposed consumer-benefiting nature, price wars are beginning to lose their appeal.

Perhaps it’s because three of the big four UK grocers claim to be the cheapest in some way. Perhaps it’s because of the 4.5 million consumers that tuned into BBC’s Panorama exposing the supermarkets’ pricing agenda. In any case, price wars are becoming less effective.

Certainly value is important to shoppers. However, there is a real difference between low prices and value for money – something Tesco seems to have confused in recent times – and we can’t forget that people are still looking for little luxuries in the supermarket.

At the same time, many shoppers have become dubious or simply blasé about the sheer amount of promotions in-store. The basic rules of ‘bigger pack, better value’ and ‘own-label being cheaper than brands’ no longer ring true.

My local supermarket has aggressively communicated that a large carton of milk is now 24p cheaper, but hasn’t been so vocal about the price of cereal going up by a similar amount. It’s no longer a case of who is genuinely offering the lowest prices, but who is marketing them most effectively.

The challenge for supermarkets, once the resilient beasts of retail with their non-discretionary offering, is that shoppers are now putting fewer items in their baskets.

Price cuts do not guarantee volume growth, as Tesco has learned over recent months. Even Ocado shoppers are putting fewer corn-fed chickens and quail eggs in their baskets.

The good news is that food inflation has begun to subside, partly retailer-induced, partly the natural course of commodity prices easing. In fact, in December, value growth exceeded the rate of food inflation, reversing a trend that has generally plagued retailers for most of last year.

Looking ahead, we can’t ignore the additional 2.5 billion mouths that will need feeding by 2050. The consequent strain on food resources will make it much harder to keep prices down. But by then, common foods like beef may become expensive luxuries, leaving Tesco’s Big Price Drop to cover less conventional alternatives. Buy one grasshopper, get another insect free?