Struggling Asda 'cheapest' supermarket for branded goods - Which?

A study of major supermarket prices has found the worst performer in terms of sales growth last year actually offered shoppers the best value for branded goods.

As prices for many such items are tipped to rise sharply during 2017, Which? said its research covering 80 products found they collectively cost £154.14 on average at Wal-Mart-owned Asda during 2016.

The consumer group said the basket of popular goods beat off competition in 11 months out of the 12.

Morrisons, the report claimed, sought £6 more for the goods on average while they cost Sainsbury (Amsterdam: SJ6.AS - news) 's customers £162.11.

Tesco (Frankfurt: 852647 - news) was the next most-expensive, the study found, at £164.19 while Waitrose charged £172.27 for the items on average over the calendar year.

German discounters Aldi and Lidl were not included as they do not sell enough of the branded products in the basket.

The findings are interesting in that Asda endured a tough 2016 - with a new chief executive taking the reins in the summer.

While it was the worst performer of all the major chains in terms of sales - with volumes declining at a record rate at one stage - the supermarket price war is believed to have taken its toll on profits too.

Asda does not have to reveal its earnings because, unlike the rest of the 'big four' which are listed on the FTSE 100, it is not subject to the same City reporting standards.

:: Tesco sales up but warns on price

While Asda is yet to give an update on its performance over Christmas, all the others - including the discounters - have been reporting growth on 2015's festive season.

A report by Kantar Worldpanel earlier this week revealed that grocers collectively raked in almost £500m more in the 12 weeks to 1 January though it calculated Asda sales fell by more than 2%.

It also warned some prices were finally starting to rise after a period of more than two years of deflation for the sector.

That said, the industry price war looks set to continue, to a degree, despite pressure to pass on higher costs associated with the slump in the value of the pound since the Brexit vote which has made imported goods and ingredients more expensive.

That is because chains continue to warn of a competitive environment as pricing strategies are devised - highlighted by the so-called Marmitegate row between supermarkets and manufacturer Unilever (NYSE: UL - news) last year.

Which? magazine editor, Richard Headland said: "With (Other OTC: WWTH - news) increasing concern over rising food prices, our research shows that some supermarkets are consistently cheaper than others for popular branded items.

"It could be worth switching supermarkets, or shopping around, if you want to trim your shopping bill."