Leading UK multiple Tesco has announced a new wave of price cuts, the second since January. Some product prices will be lowered by as much as 20% and the overall package of price cuts will wipe £55m off 1004 items. Tesco claimed that the cost of an average shopping trolley would be slashed by 11% for a pensioner, 9% for a young family and 12% for a student.
It is unlikely to be a coincidence that the move comes just hours ahead of a report from the UK Competition Commission following a two-year inquiry in supermarket profitability and supplier relations. While the report is expected to exonerate the supermarkets from the worst charges of anti-competitive behaviour, the majors will certainly be in the spotlight so news of price cuts is timely.
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An interim report from the Commission cleared the big five – Tesco, Sainsbury, Asda, Safeway and Morrisons – from excessive profiteering, and competition in the sector has been sharpened since the inquiry began. This is primarily as a result of the acquisition of Asda by Wal-Mart, the world’ leading retailer.
