Source: The Sunday Telegraph

Story By: Helen Pow

FIERCE price wars between the two major supermarket chains have driven down the overall cost of groceries for the first time in a year, with bread at its cheapest level in almost a decade.

The shrinking grocery bill will come as a relief to NSW families, particularly on the back of this month's interest rate cut and at a time of soaring energy bills.

Grocery survey shows that Australians are finding they do not have enough money to put food on table

Rivalry between Coles and Woolworths was a major factor behind the savings at the cash register in the three months to September.

But other factors are also contributing to the drop. Fruit and vegetables are cheaper because supply has recovered since floods and cyclones wiped out crops earlier this year, and the cost of bread, cakes and biscuits has benefited from a fall in the global wheat price.

Bread, meat and seafood are at their cheapest levels in nine years, CommSec chief economist Craig James said.

"This serves as a wake-up call that prices don't always soar from quarter to quarter," he said.

"The moral of the story is that people can become overly gloomy and overly negative but sometimes it's worth assessing the landscape a little bit more broadly because prices also come down."

Fruit, lamb and bread tumbled the most at Sydney supermarkets and grocers down 2 per cent, 3.6 per cent and 5.3 per cent respectively.

Figures compiled by CommSec for The Sunday Telegraph show a shopping trolley of goods worth $100 three months ago, now costs just over $99.

Although the savings are small, they are likely to get bigger as Coles and Woolworths continue to battle for increased market share.

To read the full story, follow this link: www.dailytelegraph.com.au/enjoy-taste-of-plunging-food-prices/story-fn6b3v4f-1226193382811