The price war between retailers in the run up to Christmas has led to a reduction in the level of price inflation, the latest supermarket share figures from Kantar Worldpanel show.

For the 12 weeks ending 7 December, competitive pricing among the retailers has led to inflation dropping to just 1.9%.

Tesco remains Ireland's leading supermarket, despite a 3% drop in sales. SuperValu comes in second, with Dunnes Stores in third. The top three are separated by just 1.5%.

Lidl and Aldi continue to grow in sales, reporting growth of 16.6% and 13.1% respectively. The two retailers now hold a combined market share of 16.2%.

David Berry, commercial director at Kantar Worldpanel, commented: “In a bid to emerge victorious over the all-important Christmas period, competitive pricing among the retailers has led to inflation dropping to just 1.9%. Shoppers are reaping the benefits, with staple items such as vegetables, eggs and bread costing less this year compared with last – meaning savings on Christmas dinner purchases.”

He added: “Lidl and Aldi have each enjoyed strong sales growth throughout 2014. It seems likely that they will maintain this streak over the festive period, which will top off what has been a stellar year for the German retailers.”