Asda slashes 3,600 prices despite 'store wars scepticism'

Asda is to cut prices on thousands of its products this month, the supermarket chain announced yesterday.

The UK's second-biggest grocer, said it was reducing the price of 3,600 essential products, including potatoes, carrots, grapes, bananas, milk, nappies and cheese in January but added that the "vast majority" of the cuts would last for a minimum of six to 12 weeks. Asda said the measures would save customers "millions of pounds off their weekly shop", adding that the average price of the product will be trimmed by 13 per cent.

The supermarket also unveiled a three-point checklist for customers, which included them not having to pay more depending on where they live and reiterated its national pricing policy.

The price cuts follow statements by the biggest four supermarkets that they have held off reintroducing the 17.5 per cent rate of VAT on many non-food products from 1 January. The listed grocers, Tesco, Morrisons and Sainsbury's, are all due to update on Christmas trading this month and with food price inflation falling, the battle to grab consumers' money is as fierce as ever.

Tesco has already launched a special offer promotion on 12,000 of its goods. And Sainsbury's says it has reduced the price of more than 3,600 products.

However, retail analysts also pointed out that the first week of January is often characterised by these type of grocery price-saving claims.

Jonathan Pritchard, an analyst at Oriel Securities, said: "The numbers they bandy about are always open to discussion and I would have been surprised if two or three players had not come out with this type of announcement for the month."

In a tacit acknowledgement of scepticism about the supermarkets' campaigns, Asda also said it was "upping the ante in its campaign to rid the industry of phoney price claims".

Darren Blackhurst, chief merchandising officer at Asda, said: "People are sick and tired of being tricked and deceived by dodgy claims and bogus buy one, get one free offers."

Sainsbury's will issue its third-quarter trading statement tomorrow and consensus is for underlying sales of between 3 and 4 per cent, excluding fuel. Tesco will update on its sales next Tuesday and Morrisons on 21 January.