In an intensifying price war between Britain’s grocers and Germany’s discounters, Morrisons is to slash the prices of 200 “everyday items” by upto a third.
The UK’s fourth largest supermarket announced price cuts under new CEO David Potts’ leadership today.
Like rivals Tesco, Asda and Sainsbury's, Morrisons is lowering its prices in an attempt to reduce the number of consumers opting to shop at Aldi and Lidl, which are continuing to grab market share. The supermarket chain was hit hard last year when profits halved, its lowest recording in eight years. It followed by committing £1bn over the next three years to lowering prices.
This mirrored similar moves from its rivals, with Asda committing £300m to lowering prices in the first three months of the year, Sainsbury's investing £150m to reduce the cost of 1,000 products and Tesco dropping prices on 2,500 "essentials".
At Morrisons, four pints of semi-skimmed milk will drop 11% to 89p, while some bread brand prices will fall by 21%, the company said. Potts cited that the price reductions would mean the cost for "cupboard essentials will be amongst the lowest on the market."
According to research by Kantar, a typical basket of everyday items is now 2.1% cheaper than it was in 2014, since all major retailers are offering cheaper like-for-like goods.
All major grocery players are having to deal with record commodity-driven industry price deflation although industry data last week showed Morrisons had returned to sales growth for the first time since December 2013.