Falling food prices cause value of UK supermarket sales to drop despite increase in volume

The value of supermarket sales in the UK decreased by 0.3% in the three months to 20 June compared to the same period in 2014, with a fall in food prices to blame.

Although sales volume increased by 0.3%, the supermarket price war fuelled by fierce competition dragged the total value down and saw Asda's sales decline by 3.8%, a study by data insight company Nielsen revealed.

"Asda is falling behind its peer group, in contrast to Morrisons, where things are looking encouraging," Mike Watkins, Nielsen UK head of retailer and business insight, said in a statement. "Sainsbury's performance remains broadly the same whilst Tesco's fall in sales is now slowing."

German retailers Lidl and Aldi, which have reported the highest UK sales growth of the top 10 supermarkets in the quarter to 20 June, continue to form a challenge for the market.

To compete with Lidl and Aldi, the Big Four (Sainsbury's, Tesco, Asda and Morrisons), were forced to cut their prices.

"Deflation is taking the edge off sales growths but supermarkets are still seeing sustained, albeit small, growth in volumes," Watkins said. "One third of shopper spend is on promotions and price-cut items – this level of promotional activity encourages shoppers to visit more often but does mean spend per visit is down a little on last year at many supermarkets."

Aldi performed best out of the 10 biggest supermarkets, reporting a jump of 20.1% in like-for-like sales and growing its market share by one percentage point to 6%, beating The Co-operative Food.