Star comment: Price war may bring losses too
The store wars are more intense than ever. But this is a conflict in which ordinary people are not the casualties, but the beneficiaries.
The more the supermarkets are at the throats of each other, the better it is for consumers. They are the ones that the shops and superstores are desperate to woo.
Figures today show just how well this cut-throat competition is working out for shoppers.
Shop prices have been falling. In the clothing sector, deflation has hit 13.7 per cent, while electrical goods prices are down four per cent. Food prices have risen by 0.6 per cent, which is the lowest this shop price index has seen since December 2006.
Taken overall, shop prices fell at their steepest rate for at least eight years last month, driven in part by discounting to get customers through the doors.
For the big players in the supermarket world, the pressure is on, as consumers are clearly embracing the discount supermarkets such as Aldi and Lidl. Nobody is turning their nose up at bargains and shoppers are not equating cheap with being of lesser quality.
Consumers are reaping the rewards of their own canny buying. Retailers are having to chase their markets, and at the moment they are chasing them downhill to lower prices.
While it is great news for everybody who is watching their pennies, there is too a cloud in that reduced margins affect those in the supply chain.
We have already seen in recent years how some farmers have been driven to despair because they sweat and slave and then find that they are selling at a loss.
The pressure of lower prices is felt too by the smaller retailers who cannot match the savings which come through the bulk buying power of the large supermarkets. They go from being a bit more expensive, to significantly more expensive. And when people are buying based on price rather than those more abstract things such as personal service, that is a severe handicap.
The markets are dynamic and what goes down also goes up. Nevertheless, with shop prices falling for the 14th month in a row it looks like a buyer's market out there.
How long will it last? Various factors are coming into play and at the moment they are all working in the consumers' favour.
Snap up the low prices while they last. And remember that that which is cheapest may not always be the best value.
