Tesco And Asda Launch Price Cut Campaigns

Thu, 18 Sep 2008
 
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Supermarket giants Tesco and Asda have launched their biggest price-cutting campaigns of the year in response to higher inflation figures.

Asda yesterday announced price cuts on 5,000 of its everyday food and drink products, including bread, potatoes, teabags and frozen peas, and claimed the reductions could slash customers’ weekly shopping bills by more than 50 per cent.

Tesco responded by launching a new "discount brands" range, of 350 no-frills products designed to provide a cheaper alternative to best-selling brands .

The UK’s largest retailer also slashed the prices on hundreds of its existing products by more than £100m in total in a bid to become "Britain's biggest discounter".

Richard Brasher, Tesco’s commercial director, said: "This is discount shopping with all the added quality and service customers want and have come to expect from Tesco ."

The latest price cuts comes as official figures showed that inflation reached a 16-year high last month, driven by surging energy bills and a record 14.5 per cent rise in food prices.

As a result, the price of a basket of 24 basic food items has increased by nearly 30 per cent this year.

Andy Bond, Asda’s chief executive, predicted that food-price inflation had reached its peak following bumper harvests around the world and claimed that a winter-long price war would be of benefit to UK shoppers.

"For the past 11 years we have been voted the UK's lowest priced supermarket," he said. "I'm determined that ASDA continues to win this coveted award which underlines our commitment to always offering our 17 million customers everyday low prices."

According to experts, Tesco’s new discount range has been based on the successful format of discount stores Aldi and Lidl, with the former luring nearly a million shoppers away from its upmarket rivals in the past year by promoting its low-cost substitutes of big-name brands .

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