The mainstream grocers have repeatedly suggested that value for money is about more than just price – but price, it seems, continues to reign supreme.

Despite concerted drives from Tesco, Sainsbury’s and Morrisons to improve availability, customer service and ranges throughout an encouraging 2016, shoppers had barely crawled out of bed and shaken off their New Year’s Day hangovers before they were raising another glass to the start of 2017’s supermarket price war.

Potts and his peers know that price is the one lever they must continue to pull

Just as it did in January last year, Morrisons has come flying out of the blocks.

Triggering the next wave of investment into its ‘Price Crunch’ campaign – which relaunched almost a year ago to the day – Morrisons has today slashed the prices of 800 products, including basket staples such as fish fingers and potatoes, as well as ‘superfoods’ like kale and avocados.

The grocer’s boss David Potts has revived its fortunes through a combination of initiatives, including store revamps, better customer service, improved quality, increased availability and a burgeoning online tie-up with etail titan Amazon.

But in uncertain economic and political times, characterised by negligible wage growth, fragile consumer confidence and the prospect of price rises following the Brexit vote, Potts and his peers know that price is the one lever they must continue to pull.

Fightback failure

Although the big four mounted a fightback against the discounters last year and cut the price differential to Aldi and Lidl, the German duo still wears the price crown.

In response, Morrisons has declared that its latest wave of cuts is designed to “help families on tight budgets in January.”

Lewis and Coupe will be alert to the prospect of losing the shoppers that Tesco and Sainsbury’s have worked so hard to win back

In other words, Morrisons is imploring customers with smaller wallets not to desert it for the discounters when carrying out that New Year’s Resolution to curb their outgoings.

Likewise, Messrs Lewis and Coupe will be alert to the prospect of losing the shoppers that Tesco and Sainsbury’s have worked so hard to win back over the past 18 months.

Any widening of the price differential to the discounters, or being seen as a “bystander” to Morrisons’ latest investment, could easily turn shoppers’ heads elsewhere as they seek to tighten the purse strings.

And, of course, lurking somewhat ominously in the shadows of its big four rivals at the moment is Asda.

The Walmart-owned grocer has already signalled its intent under new boss Sean Clarke after launching the ‘That’s Better’ campaign last September – and further price investment is a near certainty in 2017 as the embattled grocer targets a sales recovery.

Big questions

All of this provides a backdrop to some big questions heading into this year.

Will its entry-level Farm brands, shop-in-shop tie-ups with Arcadia and Holland & Barrett and its Clubcard loyalty scheme be enough to keep the more prudent Tesco shoppers out of the clutches of lower-priced rivals this year?

The majority of consumers will continue to select their supermarket of choice based on two main factors – location and price

Will its perception of quality, the rollout of Argos and Habitat concessions and the Nectar scheme prevent Sainsbury’s customers from looking elsewhere to save cash on their grocery shop?

To me, the answer to both those questions is ‘probably not’.

Grocery retailers can invest all the money in the world into the shopping experience and rewarding customers with loyalty points, but unless they can create supermarkets that are exciting to shop that offer something that is genuinely unique to the market, the majority of consumers will continue to select their supermarket of choice based on two main factors – location and price.

With the big four’s space race well and truly over as far as their larger supermarkets are concerned, the contest in 2017 will be a race to the bottom on price.