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Tesco invests £200 million in price cuts
News
Tuesday, 06 January 2009 14:01
Tesco will launch a further 100 million pounds of permanent price cuts and promotions on more than 3,000 staple products from today. The broad range of price cuts, come a day after Asda lowered the prices on 1,000 everyday lines "permanently". The supermarket group said this took its total investment in price cuts over the last fortnight to 200 million pounds. Tesco said it will start an advertising campaign tomorrow that will compare prices of baskets of goods from Tesco, Asda, Sainsbury and William Morrison Supermarkets Plc. The supermarket operator said 1.1 million baskets of shopping were cheaper at Tesco than they would have been at Asda on Jan. 2. For the first time ever the retailer will use real shoppers' till receipts to show how Tesco's prices compare with rivals'. The company said that it will make its findings available "for all to see".

"This year the cost of shopping will be more important to customers than it has ever been," Tesco Commercial and Marketing Director Richard Brasher said in a statement.

Savings include selling three Hovis loaves for £3, and four multipack bags of Walkers Crisps for £4. Hovis loaves usually sell in Tesco's stores for £1.24. Other price cuts include a kilogram of loose green grapes, which drops from £2.98 to £1.99, and a 200g jar of Nestle coffee, which falls from £4.45 to £3.

A new trend seems to have emerged for supermarkets to sell products for £1 a packet. This strategy is well tried and tested and has been hugely successful for Iceland and Poundland in the past, so there seems no reason to believe it will not succeed for the likes of Asda and Tesco.