The rate of increase in food prices has slowed sharply since the beginning of the year, according to research by retail analysts Kantar Worldpanel.

It found prices over a 12-week period to November 10th had risen 2.9 per cent, compared to a rise of 6.4 per cent during the 12-weeks to the end of January this year.

The easing in the rate of price increases will come as a welcome boost to shoppers in the run-up to Christmas.

Kantar Worldpanel commercial director David Berry said price rises across the fresh food sector had started to recede and this had brought the rate of price increases in the grocery market to their lowest level in a year.

One area which continues to experience significant inflationary pressure is alcoholic drinks. “Increased duty on alcohol as part of the October budget has affected wine in particular, where the average price has increased by 16 per cent,” Mr Berry said.

“As a result, 51,000 fewer shoppers have put wine in their baskets; while those who continue to buy have cut back by almost one bottle over the past 12 weeks.”

The latest retail share data will make for uncomfortable reading for Tesco which has seen its share of the market drop from 28 per cent 12 months ago to 26.5 per cent.

Dunnes Stores has performed better over the same period and has grown its market share from 23 per cent to 23.6 per cent.

SuperValu’s share of the market has also increased slightly with sales remaining in line with last year.

Aldi continues to set the pace however. It has 7.4 per cent of the total market now compared with a 6.2 per cent share 12 months ago.

Lidl has also seen its business boom over the last 12 months and its share of the grocery pie has increased from 6.3 per cent last year to 6.9 per cent.

The German discounters now have 14.3 per cent of the total market, compared with 12.5 per cent last year.

An equivalent survey of major supermarkets in Britain found food price inflation there was 3.7 per cent in the 12 weeks to November 10th.