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The UK's biggest food retailers are likely to resort to 'heavy discounting' to counteract the effect of a fall in annual food and drink sales.

Although the latest data from the British Retail Consortium shows that food and drink sales for the year to end-October are up, a BRC spokesman admitted that when adjusted for food price inflation, sales have actually fallen.

'A fall in the value of total sales is extremely rare,' Helen Dickinson, head of retail at consultancy KPMG tells today's Financial Times, which leads with the front page story reporting a 'plunge' in high street sales. 'There is no doubt retailers will need to resort to heavy discounting.'

Tesco, the UK's largest food retailer, has recently unveiled a new 'market value' discount brand which includes a number of fresh produce lines. Its 'Fruit & Veg Price Pledge' is part of a nationwide campaign where Tesco claims the mantle as the UK's largest discounter. Other leading food retailers are following suit, launching new discount lines in a round of price cutting that is now affecting suppliers of major lines.

'The kilo price for apples has dropped by 20 eurocents on the same time last year,' one apple supplier told Fruitnet. 'They're all discounting.' A table grape supplier told Fruitnet that the discount trend has affected Marks & Spencer as well, where suppliers have been required to supply cheaper grape packs.

Meanwhile, new research shows that more Italians are living a 'low cost' lifestyle. Ever more purchases are determined by price, according to Milan daily Corriere Della Sera, which reports that food and drink sales top the list at 53 per cent of all low-cost sales.

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