The supermarket price war cools as pressure on suppliers eases

The supermarkets price war could be nearing its end as suppliers start to feel the pressure on costs easing, a report has claimed.

Insolvency practitioner Begbies Traynor found in its quarterly Red Flag Alert research that the number of UK food and drinks manufacturers in “significant” distress had fallen for the first time in two years, down 4% to 1553 companies during the last quarter.

It was still triple the number struggling in the second quarter of 2013, but experts suggested it could show suppliers getting used to the new low-margin conditions.

The data also showed the grocery sector is showing signs of recovery with the number of grocers in “significant” financial distress down 5% to 5002, the first fall in two years.

In recent years the sector has been rocked by the surge in business by Aldi and Lidl and led to the biggest players — Tesco, Asda, Sainsbury’s and Morrisons — cutting their prices.