Supermarket wars are in full swing now with a couple of our main supermarkets introducing new ways in which they will be keeping prices down and competing with each other. This follows competition brought by discount chains such as Aldi and Lidl who are able to attract customers with their very low prices. It is believed that these discount stores could hold a 15% share of the grocery market in the next 5 years.
Today, Morrisons will be lowering the prices of 135 products, including flour and oven chips, by an average of 14%. This price drop is set to rival Asda who have also chosen this method of trying to win back customers rather than holding promotions.
In March, Morrisons announced they would be spending £1 billion on lowering prices, developing a loyalty scheme and improving their own brand products. In May, many prices were lowered and the price cuts today will be in different categories to those which happened last month. These changes are a must for Morrisons who are trying to win back customers and revive their business following a 7.1% drop in like-for-like sales in the 13 weeks leading up to May.
Sainsburys are also shaking things up through announcing a partnership with Danish company Netto. The two chains will be launching discount stores in the UK and have planned to have 15 open in the North of the country by the end of the year. The stores will sell fresh food, have an in-store bakery and hold weekly offers on home and seasonal products. If the first 15 stores are a hit with consumers more stores will be opened across the country.
Now it is only Tesco who need to release their plans and with their annual meeting being held on Friday it should not be long until we find out what they are! With the supermarket industry becoming such a difficult place to do business it means that competition is high which leads to lower prices for us as consumers and gives us a bit more variety too!
By Sasha Davison
23rd June 2014
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