Price war looms on organic produce

The UK's biggest grocers will try to reinvigorate sales of organic food next week, following evidence that the organic market has suffered its sharpest fall for a decade.

After what had been a meteoric rise to annual sales of £1.3bn, according to the market research firm TNS Worldpanel, organic eggs' sales tumbled 18 per cent in the four weeks to 10 August, as customers opted for cheaper free range products, seen as ethical. A source at a big UK grocer admitted that sales of organic food were flat.

Supermarket chains including Asda, the Co-operative Group, Sainsbury and Waitrose will launch a series of promotions during the Soil Association's Organic Fortnight, which runs for two weeks from 6 September. The chains will also focus on promoting basic brands, as evidence emerges that consumers are now favouring cheaper produce.

Asda will launch promotions in many categories, including "price rollbacks" on everyday items and food sampling across 250 stores. The chain claims to have avoided a fall in organic sales, as does Waitrose, which is also introducing promotions for Organic Fortnight.

A spokeswoman said Waitrose had seen a change in the type of organic products being bought: "Value-conscious customers are focusing their organic spend on areas they feel are the most important. This dovetails with increasing concerns about animal welfare."

Duncan Gibson, managing director of Abel & Cole, the organic food home delivery specialist, admitted the market was slowing but said the internet retailer was still growing sales strongly. The firm will run a 20 per cent price promotion on most lines from mid-September and is on track to grow total sales by 25 per cent this year.

The Co-op's price promotion, cutting 20 per cent on organic produce, began on 25 August and runs to the end of Organic Fortnight.

"Our organic sales are ahead year on year," said the group's head of food retail marketing, Debbie Robinson. "Sales of free range and organic chicken are 57.9 per cent up year to date."