Asda makes biggest ever price investment as battle for spend intensifies

The grocer will invest the money in the first quarter of 2015 and bring down prices on 2,500 “customer favorites including weekly essentials and big brands”. The discounts are not all permanent, some last for a matter of weeks, while others are ongoing.

The £300m forms part of Asda’s five-year plan to invest £1bn in prices and £250m in quality as it strives to “widen its price gap to the other big retailers and positioning Asda price even closer to the discounters”.

Sector-wide price cuts

The big four are ploughing huge levels of investment into reducing prices as they battle the rise of the discounters.

Tesco is expected to unveil its price cut strategy when it updates the market on Thursday. Morrisons launched a plan last year to invest £1bn in prices over a three-year period and Sainsbury’s said in November it would spend £150m on reducing prices.

Asda will focus the price drops on essentials including fruit, vegetables, cereals, nappies, loo roll, milk, eggs, meat and fish. 

Asda chief merchandising officer for food Barry Williams said: “After a great Christmas with the family, January is the month we all start looking at the size of our waists and our wallets.

“We invest in price year round but we’re kicking off January with our biggest ever rollback – spending £300m to bring more value across our stores and online on the products customers buy week in, week out.

“We’re going further than ever before, rolling back those everyday, can’t live without items at a bigger percentage than we’ve ever been able to do previously.

“With hundreds of products at 50p, and even more at 15% less than normal, we’re aiming to make a big difference for families in their weekly shop.”