Tesco’s Big Price Drop may have slashed the prices of 3,000 items before promotions - but it has had no impact whatsoever on overall base prices at the retailer.
The latest Grocer Price Index reveals that for the month to 25 October, month-on-month base prices had remained unchanged at Tesco despite the much hyped price-cutting offensive launched on 22 September. Year-on-year prices were actually up 4%, with only Morrisons increasing them more.
That’s not to say there were no price shifts at category level and whether Tesco shoppers forked out more or less on their shopping depended largely on how healthy their shopping habits were. Base prices of alcohol, tobacco and snacks have all risen more than 1% in the latest figures, compiled for The Grocer by BrandView.co.uk.
Other categories, however, have seen significant price cuts, Tesco reserving its biggest reductions for the fruit and veg aisle, where prices have fallen 2.5%. Tesco has not been the only supermarket to publicise its price credentials. Waitrose launched what it called its “biggest-ever value campaign” earlier this month, hitting TV screens, press and the internet to publicise the message that the supermarket offers “thousands of ways to great value”.
Shoppers may therefore be surprised to learn that even with the impact of promos factored in, Waitrose was the only supermarket to up its prices month-on-month, albeit by only 0.1%. The biggest cuts have come from the supermarket that has made comparatively little noise about price - Morrisons. It has slashed monthly base prices by 0.9% and reduced prices after promos by 0.8%.
The bulk of the savings have been in the chilled section, where prices after deals have plunged 7.6% month-on-month.However, its base prices are still running 5% higher than a year ago, making it the supermarket that has increased prices the most, year-on-year, of the big four. Arguably, it has had more room to manoeuvre than others, especially in chilled where last month’s price cut came after it had pushed through month-on-month price hikes after deals in May and June - of 5.8% and 8.1% respectively.
Morrisons, Sainsbury’s and Tesco have all made some progress towards closing the price gap with Asda. Indeed, Asda’s prices have fallen just 0.4% month-on-month when deals are factored in compared with 0.8% at Morrisons and Sainsbury’s and 0.7% at Tesco.
There is still a long way to go, however. Asda’s prices are only 2% higher year-on-year whereas prices at the rest of the big four are all 4% higher than a year ago. Across the mults, baby product prices have fallen the most over the past month, dropping by 3.2% on average - and a whopping 11.2% at Tesco after deals.
Other categories that saw average monthly price cuts of more than 2% were dairy, bakery and fruit and veg. The biggest price increases were in household, tobacco and health and beauty.