1. Channel: Mass

Tesco Irish Price Cuts Instigate Price War

“Supermarket price war: retailers to ‘come out fighting’ after Tesco’s pledge to cut more than 700 grocery items.

“Move is likely to put pressure on other supermarket chains to follow suit, leading to significant savings for Irish consumers.

“Ireland’s leading supermarkets are likely to follow Tesco’s lead in reducing the price of hundreds of products or risk losing market share, a retail analyst has suggested.

“Tesco said it has cut the price of more than 700 products with the price cuts averaging 10 per cent and including both own-brand products and branded products covering grocery staples as well as household and health and beauty products.

“A 10 per cent cut in the cost of a weekly shop would amount to savings of more than €500 when spread out over the course of a year and if it is replicated by Dunnes Stores, SuperValu, Lidl and Aldi, it could have a significant impact on household budgets as well as pushing food inflation lower.”

However, “in response a Lidl spokeswoman noted that ‘the vast majority of products reduced are predominantly national brands which Lidl does not carry or carries cheaper own-brand options.’

“She said that of the private label products reduced by Tesco, ‘the vast majority are still more expensive than Lidl everyday prices’.”

KC’s View:

Which explains why they call it a ‘price war.’  The problem for Tesco and many of its brethren, it seems to me, is that to some extent, Lidl and Aldi are the ones setting the terms under which the battle is being fought.  And that’s a problem.

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