Asda has slashed the price of milk this weekend to just 50p for two pints and says that the last time customers in the UK could buy milk at that low price was in 2001.
And, not to be outdone, Tesco bowls in with the news it has a staggering amount of products on promotion this week. It reckons it has saved shoppers£620 million on their weekly shopping bills since March and this week alone it has 18,000 products on promotion.
The latest price wars will likely have Morrisons and Sainsbury’s following suit with their special offers over the weekend. Morrisons will no doubt extend its Price Crunch promotion and Sainsbury’s will be thinking hard about how it can counter the hype.
Asda financial chief Judith McKenna said yesterday that the price wars have never been keener between the supermarkets and that Asda is working hard at efficiencies in the business to make sure it can reinvest money into its promotions.
Customers must surely be grateful for the supermarket price wars as they seek to find the best deals. They don’t want to compromise on food for their family and if they shop around, they won’t have to.
The war between the grocers will undoubtedly become more intense. Most grocers – and other retailers – will say that they are planning for the downturn to last another 18 months at least.
The grocers have to do everything they can to keep their customers. Yet, when the economic outlook starts to look brighter and customers have that bit more money to spend, we are in danger of being left with four competing grocers that have a proposition that is all about price.
It’s difficult to see how the grocers can show their unique selling points in this climate. Consumers are shopping on price and, while one grocer may have a nice range of regional goods in its stores or an exclusive range of fruit, it is not drawing in the crowds.
Grocers should do everything they can to maintain and grow market share, but they also need to think about their long-term proposition. They shouldn’t make price the only reason customers want to shop in their stores.