Cadbury, Kellogg’s and Kingsmill feel the pain of supermarket price war

Boost for shoppers as price of leading brands falls as Tesco, Asda, Sainsbury's and Morrisons cut prices

Cadbury, Kellogg’s and Kingsmill feel the pain of supermarket price war
The price of Special K has been cut as supermarkets put pressure on key suppliers Credit: Photo: AP

The biggest food brands in the world are being squeezed by the supermarket price war in the UK, with Cadbury, Kellogg’s and Kingsmill under pressure.

New research shows that supermarkets have cut the price of Cadbury products such as Dairy Milk chocolate by 7.9pc, while Hovis has fallen by 7.6pc and Kellogg’s Crunchy Nut by 6.4pc.

The drop in prices is a boost to cash-strapped British consumers but demonstrates how wounded supermarkets are spreading the pain of their troubles to major suppliers.

As well as cutting the prices they pay for products, the leading grocery retailers are also removing brands from their shelves in order to simplify their range and save money. This has led to Tesco delisting Kingsmill, one of Britain’s best-known bread brands.

The analysis of Britain’s top 100 food brands by The Grocer magazine shows that 41 have seen their average price fall compared to a year ago. The bread brands have been among the worst affected, with Warburtons down 3.5pc, Kingsmill 5.6pc and Hovis 7.6pc.

However, Cadbury suffered the greatest fall in prices with an 7.9pc decline, while Bakers, which produces dog food, dropped 7.7pc. The other brands to see significant falls in prices include Kellogg’s, which is under pressure from the growth of healthy breakfast brands and supermarkets’ own-label cereal. As well as the price of Kellogg’s Crunchy Nut falling 6.4pc, Special K has dropped 3.4pc

On top of suffering from falling prices, the brands are also seeing fewer shoppers buy their products. The Grocer’s research showed that 53 of the top 100 brands have seen sales decline over the last year. The worse performing major brand was WeightWatchers, which suffered a 21.6pc fall in sales.

The pressure on retailers and the leading brands has led to clashes over supply deals. Earlier this month it emerged that Tesco has pulled Schweppes from its supermarket shelves after falling out with Coca-Cola over the price to charge consumers for its drinks.