European grocery prices increase at slowest rate for six years
The price of items in Europe's shopping-basket have risen at the slowest rate for six years, as the price war in supermarkets continues to hit grocers.
As a result, shoppers are purchasing more of such grocery items including food, drinks and toiletries, with sales volumes increasing year-on-year for the eighth quarter in a row, Nielsen data shows.
In the first quarter of 2016, prices for fast-moving consumer goods were up by just 0.7 per cent – the smallest rise since the first quarter of 2010 – and volumes were up by 0.8 per cent year-on-year.
As a result, supermarket takings increased by 1.5 per cent, the lowest number since the second quarter of 2013, when the figure rose by 1.2 per cent.
UK figures moved into positive territory, up by 0.5 per cent, for the first time in nearly two years – since the second quarter of 2014 – but the figure was still the sixth lowest of the countries surveyed.
Jean-Jacques Vandenheede, Nielsen's European director of retail insights, said: "Europe was dragged down this quarter by significant falls in prices being paid in two of the big five markets – Germany and Italy.
"Lower prices are being driven by fierce price competition among the retailers and falling production costs, mainly due to lower energy prices.
"The picture across Europe is one of disparity, almost chaos. There is no consistency in performance between countries and no one big trend."
Out of the 21 European countries surveyed, Turkey's grocers had the highest increase in takings at the till, up by 9.7 per cent, followed by Poland, up by 4.8 per cent and Hungary, up by 4.6 per cent.
The biggest declines in takings were in Greece, where the figure was down by 6.1 per cent, and Finland, where prices were down 2.8 per cent, underlining the lack of unity across the continent.