The UK’s two largest supermarket groups have nailed their colours to the mast by announcing swingeing Christmas price cuts, sparking fears for downward pressure on supplier incomes.
Asda announced third-quarter figures at the end of last week and declared it will cut the cost of Christmas for its customers by £150 million, also forecasting “the most competitive Christmas of the decade”.
Tesco hit back almost immediately, saying it would save its customers £250m, stoking immediate fears of a price war.
But an Asda spokeswoman told freshinfo: “What Tesco is doing does not really mean anything to us: we are just focusing on keeping our prices low for our customers…
“The way our business model works is that we are lean and efficient and we pass on those savings to our customers because we want to give them value. We would never pay our suppliers any less. We are not squeezing our suppliers at all. We work with them to help them become more efficient. It could be something as simple, for example, as turning the lights off at night.”
Meanwhile, Tesco declared it has cut thousands of prices in store, including offering top-fruit and citrus packs at two for £2.50.
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