Asda and J Sainsbury fired the latest salvo yesterday in the supermarket price war, with Tesco also expected to launch a round of price cuts tomorrow as the big four battle it out to win over shoppers’ loyalty.
Walmart-owned Asda pledged to spend £300m lowering prices in the first quarter of 2015 as part of its £1bn, five-year investment strategy unveiled in November 2013.
The Leeds-based group, which reported its worst quarterly sales performance in November in nearly 10 years, said over 2,500 every day products including fruit and vegetables, fish cereal, and toilet rolls will be cheaper for customers.
Products like Dettol antibacterial wipes and Fairy washing up liquid will be rolled back to £1 and Bold Liquitabs to £3 from £6.
Barry Williams, Asda’s chief merchandising officer for food, said: “We’re going further than ever before, rolling back those every day, can’t live without items at a bigger percentage than we’ve ever been able to do previously.”
Meanwhile Sainsbury’s, which will update the market this morning on its Christmas trading, said it would lower prices on 1,000 products by investing £150m this year.
“This will come as welcome news to customers who might be feeling the pinch after Christmas,” chief executive Mike Coupe said.
Tesco is expected to follow with similar price cutting initiatives on Thursday when chief executive Dave Lewis reveals the outcome of his strategic review after being parachuted into the company last year.
The retailer, which is reeling from an accounting scandal and four profit warnings that halved its share price last year, could also detail substantial property asset write-offs to reflect the diminishing value of large out-of-town stores and land, analysts said.
Cantor Fitzgerald’s Mike Dennis believes Tesco could signal £4bn of asset sales, a £2bn writedown on UK land and existing supermarkets, head office closure savings of £250m and annual cost reductions of £500m.