Statistics from the Office for National Statistics show that the amount British consumers spent on food fell by 1.3 percent in July compared with a year earlier, the first annual drop since records began 25 years ago.

Previously, individual items have been slashed in price, but increasingly supermarkets are driving down prices across whole ranges of goods. While this is good for consumers in the short-term, it could in the long-run have a negative impact due to things like pension schemes being tied up in the stock market.

Jon Copestake told VoR: “We’re seeing the beginning of a price war between UK retailers. This is part of the swingeing price cuts that are starting to be applied by the mid-market retailers in a bid to try and address the disruptive discounting that’s been taking place since the economic crisis seven years ago.

“That’s one of the key factors that’s driving down prices and driving down demand levels. It’s the likes of Tesco, Morrisons and Sainsbury’s.

“What’s interesting about this particular price war is that, previous price wars in the UK have usually taken place because the mid-market retailers are putting up loss-leaders to compete against one another, on bread or bananas. Those things drive footfall and become a big marketing thing for them.

“But at the moment, they are feeling a very real degree of competition from discounters [like Aldi and Lidl] who are seeing their market share grow consistently. Consumers are increasingly shopping in different stores for different goods in order to get the best deal, the best quality, depending on what their view is. And this is squeezing out mid-market retailers.”