Economists like to remind us that there is no such thing as a free lunch. But if you shop at Morrisons, it can definitely be cheaper.
The supermarket has fired the opening salvo on what could be a food to go price war by slashing the price of its lunch time meal deal. More Card holders can now pick up a main, a side and a drink for £3.65, 10p less than last week, and cheaper than all of its big four rivals, by up to 30p in the case of Sainsbury’s, 20p for Tesco and 9p for Asda.
Morrisons was keen to drill that home in the press release, in which it declared the offer “the cheapest supermarket meal deal on the market”.
But not only is Morrisons “serving up a serious bargain”, it is extending its offer, adding new freshly prepared baguettes and pastries from its Market Street bakeries, as well as salad boxes from its salad counters.
The move makes sense.
With Brits now back in the office in ever greater numbers after working from home during the Covid-19 pandemic, lunchtime and evening trade have been an increasingly fertile ground for the mults.
It’s led to a flurry of new dine-in options, and lunchtime meal deals, as time-poor shoppers chase convenience and value, while supermarkets continue to expand their c-store estates.
But, despite the popularity of meal deals, and probably despite supermarkets’ best efforts, the price of a meal deal has only been going one way: up.
Over the past year, both Sainsbury’s and Tesco have had to hike the price of their meal deals by more than 5% due to global supply and cost pressures. Then in June, The Grocer revealed that Waitrose had hiked the price of its own more premium offer by 10% to £5.50.
Sizeable negative coverage in the red tops and consumer press shows just how popular those moves were with shoppers.
On paper, Morrisons’ drop is small – 2.7% – but in an industry where margins are typically 3%, and against a backdrop of others inflating, Morrisons is making a shrewd PR move by reducing its own.
It’s a sign of the confidence within the business about its current direction of travel under CEO Rami Baitiéh, who is now in the third year of his turnaround plan, with both sales and volumes growing, the latter by 3% in August.
It also shows that Baitiéh is serious about his intention for Morrisons to be “unbeatable” on hundreds of core lines, following the launch of its new sector-wide price match scheme over the summer.
By integrating its instore bakeries and salad counters into the meal deal offer, Morrisons is also playing to its strengths, adding a genuine uniqueness. In its own words, it’s taking the meal deal “beyond your bog-standard sandwich and crisps combo”.
The question now is whether others will choose to adjust their own offers, and drop prices too.
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