Tesco and Asda’s price cutting, focused on branded items, puts the pair on “almost an even footing” but Sainsbury’s was found to be “off the pace”.
Blue Oar analyst Greg Lawless said: “In our view this is becoming a price war, particularly given the price cuts on branded products.” He said that the grocers with the weakest operating margins, including Sainsbury’s, stood to lose most if price campaigns are sustained and that all grocers’ promotional efforts stand at about 30 per cent of their total activity.
On a basket of 67 items, Asda was cheapest at£100.57, followed by Tesco at£101.11. The price gap is just 0.5 per cent and does not include any benefits of Tesco’s loyalty scheme. Morrisons’ basket was£101.85, while Sainsbury’s was£106.50 and Ocado’s was£108.29.
Lawless said: “The results are meant to be illustrative, not scientific, but this January does feel different to last year – a lot more aggressive. While there isn’t much between them, Sainsbury’s is way out of the pack despite their price claims.”
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