The banana price war has taken another twist with Tesco taking prices on its Value offer to just 59p a kilo.
The retailer is offering a 1.5kg bag of bananas under its economy brand for 89p. This equates to around 26p a lb, the lowest figure to hit the market for a number of years and represents an incredible 45 per cent price deflation in the last two years.
The fresh round of price cuts on the UK’s most popular fruit was sparked last month when Asda launched its Smartprice economy offer into the fruit sector, selling pre-packed bananas for 65p a kilo.
One banana importer described Asda’s decision at the time as “lunacy”, particularly at a time when the supply of bananas was tight, but the other retailers quickly followed suit.
Tesco has now upped the stakes and it just remains to be seen whether the other retailers fold or stay in the game.
However one industry insider speculated that the motive behind the Tesco move was a desire to strengthen its position against Morrisons.
The Bradford-based retailer arguably stands to lose most by matching the Tesco decrease, as the majority of its banana offer competes directly against Tesco’s Value range, while for Tesco, its Value banana offer represents a relatively small proportion of its banana sales.
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