Supermarket inflation: real or not?

"Supermarkets are now passing on the vast majority of their costs. Most of these price promotions are an astute use of marketing spend, not a real price war,” commented Richard Perks, a retail analyst at Mintel.

The Producer Prices Index revealed that food prices jumped by 11.4% year-on-year in August, but the Consumer Price Index (what consumers pay) for food is 12.3%.

One customer gave an example of the overpricing by big retailers: "At the local Asda store we normally £1.25 for bread and £2.47 for 6 pints of milk. At our corner store the same bread was £1.15 and 6 pints of milk £1.47. How can small corner shops actually able to sell cheaper goods than large supermarkets. Looks like we will have to shop around for the bargains."