As supermarkets take advantage of a spring production boom, Sainsbury’s has joined Tesco in reducing the price of milk by 5p a pint, as captioned by Entrepreneurng report.
For the first time since 2020, Tesco, the largest supermarket in the UK, reduced the price of milk this week to 90p for a pint or £1.55 for four pints, a 10p decrease. In the most recent instance of how companies have been attempting to win over price-conscious customers with promotions on popular items, Sainsbury’s swiftly imitated the practice on Thursday.
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The price reductions will fuel hopes of a slowing in food inflation, since Tesco reported on Thursday that grain and cooking oil prices were also declining, despite increases in rice and proteins.
“With costs rising, we are working hard to keep prices low, especially on the everyday essentials people buy the most,” a Sainsbury’s spokesperson said.
According to insiders in the industry, the overstock caused by the “spring flush”—when cows naturally produce more milk as they are released into fields—led to huge wholesalers slashing their rates by an unprecedented 5p per liter. This led to price reductions at the retail level.
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In recent months, the price of commodities and energy has decreased globally as supply constraints have relaxed and demand in advanced economies has slowed due to slower economic development.
Many consumers switched from more expensive brands to more affordable own-label butter and cheese as a result of rising dairy prices and the rising cost of an average grocery basket.
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The price reductions follow a period in which milk and dairy products have been at the forefront of significant food price inflation, which, according to the Office for National Statistics, reached 18% last month. Even with this week’s price reduction, Tesco and Sainsbury’s are still charging a third more than the large retailers did a little over a year ago when they were costing £1.15 for four pints of milk.
In conclusion, the inflation rate for milk, cheese, and eggs hit 31% in the year that ended in January, marking the biggest yearly increase since comparable records were first kept in 1989. The wholesale price farmers received increased to 51.5p per liter in December, the highest level since records began in 1970.
Source: The Guardian
