The retailer will have to invest about £10m to keep its price pledge and the move has surprised the industry because Ocado is thought to have recorded a pre-tax loss of £30m in 2007, according to The Times.
“Whether its suicidal or not is hard to say, but this could be potentially damaging for Ocado,” Richard Hyman, from Verdict, told the paper. “People aren't going to switch to Ocado because they have Fairy Liquid at a lower price. If you're worried about price, you go to Tesco. I think it's a very bold move.”
The move was designed to change the perception of Ocado, said Ocado chief financial officer Jason Gissing: “We thought the best way to demonstrate clear, transparent price competitiveness is to match Tesco prices for all branded goods stuff we sell. It will cost several million pounds but we can absolutely afford it.”