Morrisons is to cut prices on meat, fruit and vegetables this week amid a backdrop of falling food prices.
The supermarket said it would be trimming prices on nearly 160 products by an average 12%, in the latest round of its Price Crunch campaign. The latest move comes just a month after Morrisons trimmed the price of more than 1,000 products, including toiletries and seasonal fruit and vegetables, by an average of 18%.
The price cuts will be reassuring for households and the Bank of England amid worries that a weaker pound will stoke inflation by making imports more expensive. The pound hit a 30-year low against the dollar shortly after the vote to leave the EU but has since stabilised.
Retailers believe that food price inflation is unlikely to arrive until the autumn when the supply of UK-grown fresh produce reduces and they are forced to buy more food from abroad.
Manufacturers are already feeling the effects of the weaker pound, which has boosted exports but raised material costs. According to one survey last week, they have had to pass on the impact to clients.
Morrisons has so far cut prices on 4,435 products as it tries to fight back against the rise of the discounters Aldi and Lidl, which have been rapidly increasing market share in the UK. Sainsbury’s and Tesco have also cut prices on basics as they try to stem the loss of customers to the German chains.
Industry analysts have suggested that Asda, the Walmart-owned supermarket, could also be planning major price cuts. However, the supermarket poured cold water on the rumour last month, saying it remained “committed to the previously announced five-year £1.5bn price investment”.
