
As we enter 2012, the core index sits at 109% -
up 4.3% on the previous year. Prices
had been dropping steadily since the beginning of September
2011, driven largely by the price war campaigns of Asda,
Sainsbury's and Tesco, and promotions in the run up to Christmas.
Having reached their lowest point by 1st December,
prices had already started to rise before the end
of 2011. Split by retailer, the index reveals that
this recent upward movement has been driven by Asda. The only
retailer to have seen a noticeable increase in prices,
Asda's prices have risen by 1.6 index points in the
last month, whilst prices for Tesco and Sainsbury's have
continuedto fall up to the New Year. Whilst having the highest
retailer index at 110% Waitrose's prices have remained
the most constant, sitting within 1 index point since July
2011.

This quarter, prices have risen across most categories
with the exceptions being Health & Beauty and Beers, Wines
and Spirits. Frozen has increased at the steepest rate, rising more
than 2 index points in two months. As expected, the BWS market
dropped considerably from September as a result of the
seasonal sales. Health & Beauty continues to perform in
contrast to the rest of the market; rising into September when
the majority of the market had started to drop and
now decreasing to remain at the lowest index point, when
overall prices are on the rise.

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