Embattled Morrisons has taken an axe to the prices of 1,200 products as it seeks to regain momentum amid seismic shifts in the grocery market.
Referring to the volume of cuts, which are being made in one fell swoop, Morrisons boss Dalton Philips said: “1,200 is an enormous amount. There has never been an example of anybody going at that level.”
The average reduction is 17% across the 1,200 lines.
He pledged more to come and said Morrisons “is going to be cheaper permanently on the products that matter most to our customers”.
No shelf price may now be raised at Morrisons without the sanction of Philips, trading chief Casper Meijer and finance boss Trevor Strain, who hold a weekly price transparency meeting.
The offensive will be backed by a price transparency website powered by Mysupermarket.co.uk which will launch by the end of this month, enabling consumers to track the cost of every item on which prices have been lowered since the start of this year.
A TV advertising campaign highlighting the price shift aired last night during Emmerdale and Coronation Street and billboards will be unveiled this weekend.
Morrisons’ increased price aggression follows the relentless rise of discounters Aldi and Lidl and other changes such as the growth of ecommerce and convenience shopping.
Philips said the scale and pace of change in grocery is “in some ways the biggest transformation since the advent of the supermarket itself”.
But he maintained: “The actions we are taking will not only help us counter the challenge we face from discounters but attract customers from right across the sector.”
Philips downplayed the idea that the push represented a salvo in a grocery market price war.
He said: “I know this will be easy to characterise as a price war or fight-back against the discounters but this is not a temporary skirmish or a response to just one channel.
“It is not about being defined by others. It is about firmly re-establishing our credentials as a value-led grocer with a passion for food in a rapidly changing market.
“In doing so we are strengthening trust with consumers tired of phoney tit-for-tat price wars and claims which don’t stand the test of time.”
Morrisons’ investment will take a toll on already-pressured like-for-likes. Philips said: “Lower prices inevitably reduce the actual sales going through our tills. Quite simply, it’s deflationary.”
The cuts follow Morrisons’ signal at the March prelims that it would invest £1bn in initiatives including slashing prices and that this year’s profits would be half the level previously expected by the City.
Rivals Tesco, Asda and the Co-op are all also investing heavily in lower prices as they battle changed trading conditions.
Example price cuts
Six-packs of own-brand crisps down 34% to 85p
Jammie Dodgers down 55% to 49p
Napolina chopped tomatoes down 37% to 79p
Huggies Wipes down 60% to £1
Morrisons beef mince 500g down 20% to £1.99