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Supermarkets are engaging in school uniform price wars but prices cannot drop any further, an expert has said.

Youngsters are returning to school this week in Scotland, with parents in other areas of the UK preparing children for the next academic year.

They are able to buy school shirts for £1 and sweaters for £2.

But rising cotton and wool prices mean it is unlikely that uniform prices can fall any further, Neil Saunders, of Verdict Research, said.

The big four UK supermarket chains - Asda, Tesco, Sainsbury's and Morrisons - as well as Marks and Spencer, are selling the constituent parts of a generic school uniform for less than £5 each.

For example, Asda is selling a white shirt for £1, Sainsbury's has put a £2 price tag on grey and black trousers, and Tesco has blue and green sweaters on sale for £1.75.

Although labour costs are low as many of these items are manufactured in Bangladesh and China, the margin for these items is still extremely slim.

The supermarkets accept this owing to the brand loyalty they gain from customers, who buy uniforms at cheap prices and then stay in the store to buy other goods such as school accessories and groceries.

The price war is unusual and prices for many other items are rising.

The picture is also different for parents who must buy uniforms from specialist suppliers. Owing to prescriptive demands of these uniforms, prices tend to be higher than the generic supermarket clothes.

Verdict Research estimates the UK school uniform market to be worth £694m.

The average price of a standard uniform has fallen by almost 21% since 2004, it said, with supermarkets increasing their market share.

However, the total value of uniform and equipment sales has fallen from £861m in 2004 to £694m, the research group said.

Neil Saunders, of Verdict, said that the quality of uniforms tended not to be at the same level as a decade ago.

"As long as they last, parents are not too concerned," he said.

"Children run around in these things, rip holes in them, and they fall apart anyway. As long as it lasts a term or half a year, parents are quite satisfied with that."

He added that because wholesale prices of cotton and wool were rising, it would be difficult to cut prices any further.

Last month, Marks and Spencer announced it had started to sell over-sized school uniforms for overweight children as young as four.

Campaigners said it was simply commercial recognition of the fact obesity was a growing problem among younger pupils. Marks and Spencer said the trial range followed demand from parents.