Weak Pound 'Could Raise Supermarket Prices'

Supermarket prices could rise if the pound's fall continues, retail analysts have said.

According to BBC report, some 40% of food consumed in the UK is imported meaning "any long term change in exchange rates may threaten the current period of cheaper groceries," according to Kantar Worldpanel.

Online supermarket Ocado also said the weaker pound could lead to "inflationary pressure".

The pound has fallen about 11% against the dollar since the Brexit vote.

Tough competition from discount chains has helped to push the price of groceries lower over the past two years.

Kantar's comments came as it said like-for-like grocery prices fell 1.4% in the 12 weeks to 19 June compared with a year earlier, marking the 23rd consecutive period in which prices have fallen.

In the 12-week period, the combined market share of German discounters Aldi and Lidl hit a record 10.5% as they continued to attract customers from traditional supermarkets.

The "big four" grocers - Tesco, Sainsbury's, Asda and Morrisons - continued to shed market share, according to Kantar.