Tesco has set off a renewed supermarket war with plans to invest £270 million in price cutting. Asda immediately pledged £250m of its own to introduce counter measures.
The UK number one will slash the prices of more than 3,000 products as it responds to tougher competition from the reviving Sainsbury’s and Morrisons, as well as established number two Asda..
Asda reacted immediately, and will embark on a £250m spree that will eventually affect 10,000 products across food, its George clothing line and general merchandise.
Not content with a price war, the top two have also indulged in a war of words. Asda has accused its rivals of "conning" their customers while Tesco said its cuts were "genuine, unlike some of our competitors' price claims".
Asda ceo Andy Bond said yesterday: "We are declaring a supermarket price war today. Our research shows how little the average family has left once they've covered living expense which makes me even more committed to delivering Britain's lowest basket of groceries.”
And Tesco commercial director Richard Brasher said: "We want to make sure that our customers don't start their summer worrying about how to balance the budget and cutting the cost of their weekly shop is the best way we can help," he said.
Both companies claim they are acting "in the interests of consumers", but analysts predicting that Tesco will report a slowing rate of same-store sales growth on Thursday. Citigroup said Tesco's trading "seems to have slowed”.
The launch of a renewed supermarket price war would help to divert attention from the figures as Tesco seeks to claw back ground from its rivals.
