Asda Group and Sainsbury's stoked the price war between UK supermarkets today, announcing new rounds of reductions to narrow the gap with discounters.
Asda is ploughing £300 million into lowering prices on 2,500 products in the first quarter of this year, Wal-Mart’s British unit said today. Sainsbury's said it’s reducing more than 700 items this week as part of a £150 million annual price investment.
The moves intensify a price battle between the UK’s main supermarkets as they seek to stem the advance of German discounters Aldi and Lidl. Asda reported a slide in quarterly sales in November, meaning that sales are falling at all of Britain’s four biggest food sellers.
“What shoppers are looking for these days is a meaningful, trustworthy and longer-term reduction in prices of the products that actually matter to them,” said Bryan Roberts, an analyst at Kantar Retail.
Asda’s price cuts form part of a commitment to reduce prices by £1 billion over five years. Free-range eggs are reduced to 89 pence from £1.25, a loaf of granary farmhouse bread to 50 pence from 80 pence and a 750-gram bag of Russet apples to £1 from £1.25.
“We’re aiming to make a big difference for families in their weekly shop,” said Barry Williams, chief merchandising officer for food at the Leeds, England-based retailer.
Sainsbury’s price cuts are on top of more than 200 introduced in a first round of reductions in November. A loaf of wholemeal farmhouse bread falls to £1 from £1.30 and a pot of strawberry jam drops to 65 pence from 75 pence. A litre of orange juice is down to £1 pound from £1.10.
Bloomberg News, edited by ESM
