Earlier this week, supermarket giant Tesco released information on its 'Big Price Drop', a scheme whereby the prices of 3,000 products will be reduced. 500 million is being invested in the programme, the company claims. It says this it is doing this to address the fact that customers want cost-savings to be simplified.
Tesco's announcement, however, had been dismissed as a misleading ploy by the company's major rivals, who say it is designed to trick customers into thinking they're getting a better deal than they actually are.
A spokesman for Sainsbury's pointed out that Tesco is getting rid of its Clubcard 2 scheme, which will save the company 350 million. That means it's only investing 150 million in price reductions in real terms. Sainsbury's labelled Tesco's move as "classic smoke and mirrors", arguing that they are "giving with one hand and taking with the other".
In terms of market share, Tesco's closest rival is Asda. Asda released a statement declaring "no amount of spin can change the fact that our price guarantee ended price wars" (the company guarantees that a basket of groceries will be 10% cheaper than any competitors).
Morrison's, the other member of the so-called 'big four', declined to comment on the announcement.
Regardless of the posturing from Sainsbury's and Asda at present, many are predicting they will already be working behind the scenes on their own price cuts, as they don't want to lose the PR battle. This could lead to "the biggest price war in a generation," one commentator predicted.
If this does happen, farmers are worried that they will be the ones to suffer. There have been significant increases to the costs shouldered by farmers in recent years, meaning "they have precious little margin or scope to take any cuts," according to the National Farmers' Union.
However, Which? said that "hard-pressed consumers" will welcome any price cuts.
Tesco's announcement, however, had been dismissed as a misleading ploy by the company's major rivals, who say it is designed to trick customers into thinking they're getting a better deal than they actually are.
A spokesman for Sainsbury's pointed out that Tesco is getting rid of its Clubcard 2 scheme, which will save the company 350 million. That means it's only investing 150 million in price reductions in real terms. Sainsbury's labelled Tesco's move as "classic smoke and mirrors", arguing that they are "giving with one hand and taking with the other".
In terms of market share, Tesco's closest rival is Asda. Asda released a statement declaring "no amount of spin can change the fact that our price guarantee ended price wars" (the company guarantees that a basket of groceries will be 10% cheaper than any competitors).
Morrison's, the other member of the so-called 'big four', declined to comment on the announcement.
Regardless of the posturing from Sainsbury's and Asda at present, many are predicting they will already be working behind the scenes on their own price cuts, as they don't want to lose the PR battle. This could lead to "the biggest price war in a generation," one commentator predicted.
If this does happen, farmers are worried that they will be the ones to suffer. There have been significant increases to the costs shouldered by farmers in recent years, meaning "they have precious little margin or scope to take any cuts," according to the National Farmers' Union.
However, Which? said that "hard-pressed consumers" will welcome any price cuts.
No comments:
Post a Comment