Verdict says price wars benefit the consumer
Intense price competition and three years of grocery deflation will save UK shoppers more than£3 billion by the end of next year.

Tesco, Asda and Morrisons are renowned for their strong price agendas, according to the report from research house Verdict. The survey notes that Morrisons has transferred its low prices to its enlarged newly integrated store base, while Tesco and Asda have responded by cutting prices too. These moves have been accompanied by Sainsbury's bolstering its own price competitiveness.

Against these competitive pressures, smaller operators have also upped their commitment to price.

These lower price points saved UK consumers more than£1 billion this year compared with 2003. The annual saving will rise to£1.7 billion next year, with a forecast of 0.6 per cent in food and grocery deflation meaning the category will cost almost 2 per cent less than in 2003.

Of the almost£25 billion increase in the grocery market's size over the past five years - from£110.4 billion to£134.8 billion - Tesco has seized more than half. Verdict senior retail analyst Gavin Rothwell said: 'This is a phenomenal achievement for one retailer and is unrivalled in any other major UK retail sector.'

The report adds that Sainsbury's has benefited from Justin King's recovery plan to achieve an estimated market share of 12.5 per cent. Meanwhile, Asda's share increased by just 0.1 percentage points to 11.7 per cent, representing a marked slowdown compared with recent years. Morrisons - in its first full-year of Safeway ownership - achieved a share of 9.7 per cent.

According to the report, grocers are well placed to exert greater influence across retail and beyond.