Online Ocado has confirmed the sector's price war is easing off as the weakened pound starts to push up prices.

Chief executive Tim Steiner said the group was seeing 'the first signs of a change in market pricing' after competition from German discounters Aldi and Lidl caused years of food price deflation.

Ocado saw its average order size fall 1.6% to £110.84 in the 13 weeks to February 26 – a far slower rate of decline than in previous quarters.

It had seen average orders drop 2.7% in the year to November 27.

Supermarket inflation doubled in February as shoppers had to pay more for butter and tea as well as fruit and vegetables, according to figures last week from Kantar Worldpanel.

Mr Steiner said: 'While the market remains very competitive, there are the first signs of a change in market pricing dynamics coming through.

'However, it remains too early to predict how this will unfold throughout the year, and in particular is dependent on any future currency movements.'

The pound's fall – sparked by Brexit – is pushing up the cost of ingredients for many supermarket suppliers, leading many to increase their prices.

Ocado said it held retail sales growth steady at 13.1% in its first quarter, the same level of growth seen in the previous quarter.

Average weekly orders grew 16.7% to 252,000, driven by both new and existing customers.

The company remained tight-lipped on progress for its much-anticipated international deal, with finance boss Duncan Tatton-Brown saying only that the group remains 'as confident as ever'.

It has previously confirmed that it is holding discussions with a number of international retailers.