Britain's major supermarkets are testing 'peak time' pricing allowing grocers to raise or cut items based on demand.

Tesco, Morrisons and Mark & Spencer are running trials of electronic labels which allow them to change prices at the click of a button.

This would let them remove or introduce offers and react to events, such as increasing the price of barbecues during good weather.

Retail experts say this could spell the end of fixed prices for consumer goods and services within five years, to be replaced by an Uber-style pricing revolution.

This pricing system is already commonplace in Europe and the US but is likely to cause a stir if introduced in the UK, where shoppers face rising inflation and stagnating wages.

But Andrew Dark, chief executive at electronic pricing firm Displaydata, said demand for the system among UK retailers is starting to "go berserk", he told The Sunday Telegraph.

He said: "This kind of technology will be dominant in the UK within two years and within five years it will be rare to see a paper price tag. Paper tags often show the wrong prices as they have to be manually replaced by staff when prices move, but electronic labels can be updated in just 20 seconds.

"At present supermarkets are only able to act on around 20% of the price changes their computer systems recommend, but this is about to change."

Testing electronic labels

High street stalwart Mark & Spencer has trialled a similar system last year in a bid to manage the lunchtime rush in stores. By installing electronic labels it was able to offer attractive lunch offers before 11am before removing it in order to encourage people to buy their lunch earlier when stores are emptier.

A Tesco spokesman added: "We are always looking at ways to improve the shopping experience for our customers and are currently trialling electronic shelf edge labels in one of our stores. We're still at the early stages of this trial and will review feedback from customers and colleagues before deciding next steps."

Morrisons said its trial was in the "early stages" and it had not yet decided whether to roll it out across the country.