Asda said it would spend £ 73 million to reduce or freeze the price of 100 products, while Morrisons said it would cut prices to 500 products as British supermarkets struggled to retain customers amid rising inflation.
Discounted Morrisons products account for 6% of its total sales and include items such as eggs, cereals, cooking sauces, chicken and sausages. Asda said the price cuts will be for fresh fruits and vegetables, fresh meat, rice and noodles.
Recent increases in oil prices, the disruption of the global supply chain caused by the coronavirus blockade and Russia’s war against Ukraine are fueling rising inflation around the world, straining household finances.
British supermarkets are trying to maintain market share, and the big four – Tesco, Sainsbury’s, Asda and Morrisons – are watching growing competition from German discounters Aldi and Lidl. Although there are concerns about the inertia of the economy, supermarkets are also competing for staff amid a narrow labor market.
Asda said on Monday it would increase workers’ wages to £ 10.10 an hour from July, in line with earlier increases by Tesco and Lidl.
Asda has faced criticism from GMB’s union for having the lowest paid workers in large chains, at £ 9.66 an hour. Nadine Houghton, a national employee of GMB, said the salary increase was “fantastic news”.
“Retail workers, mostly women, face the reality of living on low pay every day,” she said. “Employers everywhere need to empower and properly reward those key workers who keep our main streets moving.”
Asda’s price stabilization measures will coincide with the launch of its new Just Essentials products to replace the Smart Price budget range. Asda is spending £ 45 million on next month’s product launch, although it is also facing a potential problem after its rival Waitrose threatened to sue, arguing that the branding affected its own Essentials range.
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David Potts, CEO of Morrisons, said: “We know that our customers are under real financial pressure right now and we want to play our part to help them when it comes to the cost of grocery shopping. These price reductions will have a noticeable and long-term impact on our clients’ budgets and will demonstrate our commitment to offering them the best possible value.
Mohsin Isa, co-owner of Asda after a debt-financed takeover last year, said: “We know that household budgets are under pressure from rising living costs and we are committed to doing everything we can to support our customers, colleagues and communities in these areas. extremely difficult times. “
He added that Asda’s move was “an unprecedented action to give families more stability and security in their weekly shopping”.
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