TESCO will today start a new supermarket price war by introducing £200m worth of reductions.
The retailer plans to lower prices on more than 1,000 everyday products including bread, meat, vegetables and fruits, and medicines across all of its UK stores.
The key target in Tesco’s latest promotion is rival Asda – owned by US supermarket giant Wal-mart – which last week reported a 1.6 per cent rise in like-for-like sales for the fourth quarter of 2010.
Tesco is introducing a “double the difference” scheme designed to combat Asda’s latest campaign, which promises prices that are “10 per cent cheaper than other supermarkets”, or else it will refund the difference.
Tesco’s new money-back pledge allows customers to compare prices and, if Asda is cheaper, claim back double the price difference.
Customers will be asked to keep a copy of the receipt and report the price increase on its website to receive a voucher which can be used in store.
Tesco’s UK chief executive Richard Brasher said the lower prices were designed to help consumers hit by price inflation on basic foods, such as sugar and bread, which has recently reached an annual rate of 6.3 per cent.
The retailer’s latest price scheme coincides with the departure of group chief executive Sir Terry Leahy’s departure as Tesco’s group chief executive. Leahy’s replacement Philip Clarke starts today, accompanied by a new management team.