Tesco will tomorrow up the ante in the supermarket price war in the face of “intense” competition.
The supermarket will launch its Big Christmas Price Drop tommorow (Thursday), slashing price tickets on 1,000 products.
UK chief executive Richard Brasher said the lack of consumer confidence had vindicated Tesco’s low price policy.
Brasher said things have not “got a whole lot better in terms of consumer confidence” since Tesco’s Big Price Drop was launched in September.
He said: “It has convinced me that being the right price and dropping the right prices is the right thing to do.
“Shoppers have got money to spend but are not going to part with it unless it’s absolutely right.”
Brasher defended the initiative which has come in for criticism since its launch in late September – Sainsbury’s notably labelled it “classic smoke and mirrors”.
He said: “A lot of people said The Big Price Drop was fluff and puff and then went and did their own [initiatives]. Competition in the market is intense.”
Since Tesco launched the initiative, Sainsbury’s has rolled out Brand Match across the UK, Morrisons has revealed £100m worth of price cuts in the run up to Christmas and Asda has offered customers a £5 ‘thank you’.
A Sainsbury’s spokesperson said: “We saw last time round that the ‘Big Price Drop’ was actually more a ‘sneaky price rise’ and we are confident that customers won’t be fooled again.
“This shows that Tesco can’t compete with the quality of our own brand products or with Sainsbury’s Brand Match.”
New Big Christmas Price Drop TV advertising debuted in the advert break of I’m a Celebrity… on Thursday with prices cut on the same day.
Deals include a 20% drop in a 2.5kg bag of Desiree potatoes, a 20% price drop in 1kg pork steak and a 13% off the price of a French Baton.
Brasher said the plan is to increase footfall and turnover. Brasher said Tesco has already benefitted from an increase in footfall since launching the Big Price Drop and said it is in the “early stages” of the process.
The supermarket has experienced growth in the £3bn UK toy market this year and predicts a digital camera aimed at children, a Game named Doggie Do and Monopoly will be the most popular this Christmas.
Tesco is to open its stores until 11pm on Christmas eve this year.
In addition, its consumer magazine Tesco Real Food is to host 10 home economists on its Twitter page from Christmas Eve until 8pm on Christmas Day to guide people through their Christmas dinner preparations.