Asda has expanded its latest wave of price cuts, by reducing the cost of an additional 249 lines.
The majority of the latest price cuts – 197 – are focused on fresh lines, with prices dropping by an average of 7% across included SKUs.
It follows more than 1,000 price cuts announced by Asda last week, as executive chairman Allan Leighton steps up his efforts to restore “Asda Price” in a bid to win back shoppers ahead of Christmas.
The latest additions sit across Asda’s frozen, chilled, meat fish and poultry, and produce categories. It includes Ready Rolled Light Puff Pastry (320g), which has dropped by 19% to £1.04; Exceptional Lemon Curd Yogurt (150g), which has dropped from 98p to 82p (a fall of 16%); and Wyke Farms Vintage Cheddar (300g), which now costs £3.18, down from £3.53 – a 10% reduction.
The largest reductions are to Extra Special Raw & Hand-Peeled Jumbo King Prawns (200g), which has dropped in price by 50% to £2.12, and to Cook by Asda Butternut Squash Chunks (700g), which have fallen from £2.10 to £1.38, a 34% reduction.
Asda Flavoursome Reduced Fat Smoked Bacon Medallions (down from £2.98 to £2.48); Asda Loose Red Grapefruit (down from 47p to 44p); and Asda Mild & Peppery Flat leaf Parsley (down from 60p to 52p) are among the other included products.
It intensifies fears of a pre-Christmas price war, as sector laggards Asda and Morrisons – which announced a wave of its own price cuts last month – battle to regain market share.
Following his revival of Rollback, Leighton has pledged to restore Asda’s “DNA” of being 5%-10% cheaper than its main rivals in order to grow volumes, and had indicated that Asda would invest heavily in achieving that aim. This message was reiterated to more than 600 Asda suppliers at a conference last week.
The promise has prompted both Sainsbury’s and Tesco to set funds aside in a bid to stay competitive, with the latter lowering its profit expectation by £400m for the year.
While not directly naming them, Tesco boss Ken Murphy hit back at the prospect of a renewed price push by Asda during Tesco’s quarterly results on 2 October, insisting Tesco would “invest heavily” to maintain momentum.
“It doesn’t feel that rational from where I’m sitting. The share of our results is testament to that,” Murphy said, after Tesco reported UK sales growth of 4.9% during the first half of the year.
The share price of both Tesco and Sainsbury’s fell by as much as 4.3% and 3.1% respectively following Asda’s initial price cuts announcement last week.
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