Morrisons now 'UK's cheapest supermarket'

Just as British consumers get used to going to Aldi or Lidl for bargain groceries comes the news that Morrisons is now the cheapest supermarket of all.

Last month, Morrisons vowed to start matching the prices at the two discount stores by loading points onto shoppers' store cards if their basket of groceries costs more.

And a few weeks on, an independent price audit of seven British supermarkets, commissioned by the Guardian, shows that Morrisons has overtaken Aldi to bear the bargain basement crown. Lidl, which doesn't publish 'live' prices online, wasn't included in the survey.

Earn cashback on your spending with this credit card

"Since February we've been reducing our fresh food pricing. In May we spread these price cuts right across our stores, cutting prices on 1,200 more items that are an important part of customers' baskets," Morrisons chief executive Dalton Philips tells the paper.

"They included a mixture of our own brand products – which now make up nearly half of our sales – and the key brands. The price cuts included our minced beef – 100% British, sourced by our livestock buyers and processed in our own abattoirs – down 20%."

However, making like-for-like comparisons between different supermarkets isn't always straightforward. This particular survey looks only at own-brand products, for a start.

Figures from Which? show Asda as the cheapest supermarket in October; meanwhile Good Housekeeping has carried out a price comparison for Christmas dinner, and found Iceland the cheapest, followed by Lidl; Morrisons is in third place.

Article continues below

One thing that makes comparisons difficult is that while Tesco, Asda, Sainsbury's and Ocado join Morrisons in offering a price match, they all have different criteria. Sainsbury's only compares branded products, for example, and Ocado only price-checks against Tesco.

It's also worth noting that different supermarkets win out in different categories - Aldi, for example, is actually rated the most expensive supermarket when it comes to the baby and beauty departments, meaning that parents of young children may do better elsewhere.

What is clear is that prices are coming down pretty much across the board. Food inflation is now lower than it's been for eight years - just 0.1% in October, according to the British Retail Consortium. Milk, cheese, eggs, vegetables and convenience food are all cheaper than they were this time last year.

And the price war shows no signs of coming to an end: just last week, Asda promised to invest £500 million in a new round of price cuts; the week before, Sainsbury's pledged £150 million. Analyst Kantar Worldpanel says the downward trend is likely to continue well into next year.

Do you agree with this research? Which is the cheapest supermarket in your opinion? Share your thoughts on Facebook

Read more about supermarket prices on AOL Money:

Asda promises more price cuts, as cost of UK groceries falls

Supermarket price war driving down fuel costs

Sainsbury's plans £150m price cuts