Asda stirred up the banana market again this week by slicing 14p off a kilo of loose product and announcing that it will be running a direct-sourcing trial on the fruit, similar to that set up with International Produce.
“We’ve cut the prices simply because we want to help keep the cost of living down for our customers and bananas are the most popular item in produce,” said a spokeswoman.
She added that this was counter to an inflationary trend in food in the market in general and that the cost would be entirely absorbed by Asda itself.
“We are also looking at how we can cut more costs out of the equation by trialling direct purchasing which should kick off in July,” she said.
The move has led to a copy-cat cut by other retailers, including Sainsbury’s, which is in the process of switching over to 100 per cent loose Fairtrade. “We have reacted to the Asda move as our customers are entitled to expect excellent value for money at Sainsbury’s. Bananas are a key commodity in the weekly shop and as such we will look to match our key competition on price as we have always done. Nothing has changed,” said buyer Matt North.
“Grower and supplier returns are fixed within the agreements we have made, as is the Fairtrade premium that goes back to the growers’ communities. These minimum prices and social premiums are published and as such our trading arrangements are completely transparent. So Fairtrade bananas bought at Sainsbury’s will continue to guarantee that our growers and their communities will always receive a fair and sustainable price, whatever the retail cost.”
Sainsbury’s said at the launch of its Fairtrade move in December last year that it represented an investment of £5 million, but trade sources calculate that this latest cut is costing Sainsbury’s a further £500,000 a week.
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