By Jonathan Davies

Budget supermarkets Aldi and Lidl continued to force food prices down in the 12 weeks to 21 June, according to market researcher Kantar Worldpanel.

Prices were down 1.7% during the four month period, compared with last year. Kantar said the volume of sales remained flat on last year, meaning the supermarket industry fell into decline for the first time since November 2014.

Aldi sales grew by 15.4%, giving it a record market share of 5.5%. Lidl sales were up 9.1%. Higher-end supermarket Waitrose also saw an above-market-average increase of 1.2%.

Tesco and Sainsbury's both reported 1.3% falls. Asda reported the worst drop at 3.5%. Morrisons was the only of the 'Big Four' supermarkets to report a rise in sales - 0.6%.

Kantar Worldpanel said: “Aldi and Lidl showed no signs of slowing down and are continuing to take share away from the competition. Falling prices reflect the impact of Aldi and Lidl and the market’s competitive response, as well as deflation in some major categories including eggs, butter and bread.”

Fraser McKevitt, Kantar Worldpanel’s head of retail and consumer insight, said: “Morrisons has seen the largest sales increase among the ‘big four’ retailers for the second month in a row. While only a small increase against a weak 2014, this does represent the first market share gains made by Morrisons since December 2011.”