SUPERMARKET price wars kept grocers, including Bradford-based Morrisons, under intense pressure last month, even though the rest of the retail sector grew in August.

Latest findings by the British Retail Consortium and KPMG saw like-for-like retail sales lift 1.3 per cent on the back of stronger clothing and footwear, with total sales jumping to 2.7 per cent.

But food sales fell by 1.6 per cent over the quarter, the sharpest decline since November 2009, while like-for-like sales also slipped 3.6 per cent over the last three months.

Major supermarkets including Morrisons – led by Dalton Philips who will unveil its half-year results tomorrow – have seen their market shares eaten away by discounters like Aldi and Lidl as well as cheap deals to eat out at pubs or cafes.

The report said this was the fourth month in a row in which food sales had fallen in both the like-for-like and total measures.

KPMG head of retail David McCorquodale said: “The food sector remains in a state of disruption with the share of the ‘big four’ being challenged on many fronts after a 15-year reign.

“The like-for-like decline shows the battle is being fought via the prices on the shelves, but the war may be won by those grocers best able to adhere to brand values to retain customer loyalty.”

Some analysts fear that Morrisons interim profit will have slumped by half compared with a year ago as sales continue to plunge – even through the Bradford-based retailer saw a slight sales upturn in recent weeks.

Retail analyst Kantar Worldpanel revealed Morrisons sales in late July and early August rose for the first time in more than nine months.

Dalton Philips says the firm’s £1 billion of price cuts on leading brands for the next three years was beginning to boost sales, the roll-out of online shopping was ahead of target and the firm’s convenience store programme was on-track Analysts at Barclays’ investment bank are reported to believe Morrisons will reveal first-half profits of £165 million, down from £344 million in the same period last year.

Meanwhile, accounts for the online baby and infant products retailer Kiddicare reveal a disappointing performance in its final year under Morrisons’ ownership with losses of more than £120 million in 2013.