Supermarket Giants Spark Price War

Fri, 27 Jun 2008
 
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Tesco and Asda have declared an all-out supermarket price war by slashing the price of thousands of everyday groceries .

As families struggle to meet soaring food and energy bills due to the effects of the credit crunch, both supermarkets have taken out a series of adverts in the national press promising lower prices in a bid to under-cut their rivals.

Asda has promised to sell ten staple items, including bread, eggs, butter and bananas, for only 50p from today till Sunday in a move which it claims will beat the economic downturn and win over thousands of shoppers from rival stores .

A spokesman said: "Times are getting tough and people are feeling the pinch so we have reduced the price of these ten staple items over the weekend."

In a similar move, supermarket giant Tesco has declared a series of "inflation-busting prices" with reductions of up to 50 per cent on 3,000 items from Monday in an attempt to win back customers struggling to cope with record petrol prices and energy bills .

A spokeswoman for the UK’s largest retailer said a further 3,000 price cuts will be announced next week. Tesco has already cut more than £400 million from prices this year.

"We know times are tough and customers are tightening their belts so we will be keeping an eye on prices all year," she said.

Sainsburys has also launched a price cut promotion on many of its summer goods, including strawberries and cream, which lasts until Tuesday.

Supermarkets are being forced to reduce prices despite soaring costs due to the economic slump, which is causing cash-strapped families to cut back on their weekly shopping to afford higher electricity and gas charges, motoring expenses and mortgages .

As a result, shoppers throughout the UK are increasingly turning to discount stores such as Aldi and Lidl. Aldi, the German-owned discount chain, has experienced 20 per cent sales growth over the past month - the fastest growth rate in Britain, while frozen-food supermarket Iceland has registered a 15 per cent rise in sales .

In contrast, upmarket retailer Marks and Spencer has suffered a 3.2 per cent drop in takings in its stores over the past four weeks.

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