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Tesco and Sainsbury’s to join price war

Tesco and Sainsbury’s to join price war

Tesco and Sainsbury's are expected to throw their hats into the ring of the ongoing supermarket price war.

The two retailers are set to join Asda in a price-cutting scheme designed to combat the rise of discount supermarkets Aldi and Lidl, according to food industry commentator Clive Black. Asda and Morrisons have already had to make redundancies after consumers are being given more choice by the two emerging grocers. However, the companies are looking to fight back in the coming months.

Speaking to FoodManufacture.co.uk, Mr Black, director and head of research at Shore Capital, explained that Asda has already been making price reduction measures. This has included the simplification of offers and a move away from promotional activity and vouchering. Mr Black added that he expects both Tesco and Sainsbury's to follow this trend in the future.

The food commentator told the news provider: "So, Asda is toughing it out well to our minds, a reflection of a good focus on the day job. Indeed, Asda is leading the big boys with its focus on price, proposition and costs. That said, the others are following now, which makes for a potentially even more challenging industry."

Aldi and Lidl's rise has forced the more traditional supermarkets to think of new ways to combat another competitor in an already fierce market. Sainsbury's has taken an innovative approach by teaming up with Danish retail group Dansk Supermarked to re-launch Netto in the UK.

The Scandinavian brand has not operated on British soil since 2010, but Sainsbury's and Dansk Supermarked are looking to bring it back with plans for an initial 15 stores to be opened in late-2014 and 2015. The north of England has been identified as a prime target market with the first store set to be open by the end of the year.

 

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