Big Four price war
Supermarkets slash items up to 50% in battle with Aldi
AT a time when many of us are still reeling from December, the ‘big four’ supermarkets have announced a welcome price war.
Tesco, Sainsbury’s, Asda and Morrisons are taking action in a bid to fight off budget rivals, after Aldi saw its sales surge 10 per cent last month to £1billion.
Yesterday Tesco said it is cutting the price of hundreds of products – some by more than 50 per cent – as it celebrates its centenary.
Morrisons is pledging reductions averaging 20 per cent on 935 products, including tinned tomatoes, cereals and multi-vitamins.
Asda has also introduced thousands of price cuts, and Sainsbury’s started its New Year price promotion last Wednesday. Waitrose also has some deep discounts on offer.
The New Year price war has become a retail tradition as supermarkets try to attract shoppers watching their spending following a festive binge. Morrisons’ marketing director Andy Atkinson said: ‘We’re listening to customers who are telling us that their budgets will be stretched in January.’
However, history suggests that the price cuts made to some products are balanced with increases on others, which may wipe out much of the benefit when customers add up their weekly shop. The success of Aldi and Lidl has shaken up shopping habits, forcing the ‘big four’ to slash costs, cut thousands of jobs and call off the opening of new supermarkets.
Tesco has launched its own budget chain, Jack’s, to try to counter the threat while Sainsbury’s is bidding to buy Asda for £7.3billion in a controversial merger being investigated by competition watchdogs.
The budget chains have attracted middle and higher-income families with ranges of food and drink from upmarket suppliers which have won awards in blind taste tests.
This trend was demonstrated by Aldi’s sales figures yesterday, driven by increased demand for its Specially Selected range of premium products. Big sellers included beef chateaubriand, gouda aged for 1,000 days and a foot-long pig in a blanket, with customers also buying some 17million bottles of wine, champagne and prosecco.
Other stores are due to reveal their trading figures for the crucial month of December this week.
Budget chains are now opening new stores at the rate of two a week. Aldi opened more than 65 shops in 2018, taking its total to 827. This has helped to more than double its market share since 2010 to 7.6 per cent, making it Britain’s fifth-biggest grocery chain.