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Pork chopped in first round of stores' price war.

by 5m Editor
18 June 2007, at 11:13am

UK - A Supermarket price war broke out over the weekend as the two biggest grocers - Asda and Tesco - announced tit-for-tat price cuts totalling more than 3500m across thousands of products.

Asda moved first, cutting the prices of 10,000 products. The chain, part of the Wal-Mart empire, said it was investing £250m in the price cuts and that the reductions were just "the first salvo" in a new price war. Andy Bond, its chief executive, said UK grocers had been too focused on the environmental concerns of some shoppers and had taken their eye off the ball of offering lower prices.
"We have been too attentive on a small part of the population. There is a vocal minority for whom price is less important, but there is a huge set of people out there for whom price is still very important," he said.

Within hours Tesco responded, promising £270m of price cuts on 3,000 products. Savings include 10% off the price of pork chops, from £4.98 a kilo to £4.49 and 5p off an own label sliced white loaf, from 54p to 49p.

Tesco director Richard Brasher said they were cutting prices to help families balance their budgets.

The renewed focus on price comes after a benign period for supermarket competition, which has seen food inflation reappear. Unusually, all of the big grocers have been reporting improved performance.

The return to price cutting comes as some of the grocers have been insisting that shoppers' priorities have changed and that price is now little more important than food quality and environmental impact.

Source: The Guardian

5m Editor