Asda slashes milk costs as price war escalates

Asda is opening a new front in the supermarket price war today, as the Wal-Mart-owned grocer revealed buoyant sales in its second quarter.

The UK's second biggest supermarket is cutting prices across its milk range to 50p for two pints, the lowest since 2001, as part of a wider campaign that lasts until the end of Sunday.

Yesterday, Tesco tried to steal its thunder by saying it had put 18,000 products on promotion this week, as part of the £620m price cuts introduced since March.

Asda, which has 329 UK stores, is slashing the price of a number of other core grocery items to 50p this weekend, including its own-label orange juice, 250g of beef mince, 8 pork sausages and Iceberg salad. Its previous 50p campaign was at the end of June.

However, retail analysts believe the current so-called price war among the big grocers is less fierce than that waged in the 1990s, when the German discounters, Aldi and Lidl, launched in the UK. The Exane BNP Paribas analyst Tim Attenborough said: "It is a very competitive market, but this [latest round of price cuts] is not heralding a value-destructive price war."

Asda said that its like-for-like sales grew by 5.5 per cent, excluding petrol, for the three months to 30 June. When the impact of the timing of Easter this year is stripped out, underlying sales growth was 6 per cent.

Judith McKenna, Asda's chief financial officer, declined to provide a figure for its food price inflation, but said its volume growth was "healthy". She said Asda was not losing market share to the discounters, such as Aldi, Lidl and Netto, which are enjoying a boom, partly by attracting a growing army of middle-class shoppers into stores during the credit crunch.

For the 12 weeks ended 13 July, Asda received a 12.3 per cent share of total till roll sales in the UK, whereas the discounters' combined sales were 4.3 per cent, according to TNS Worldpanel.

Ms McKenna said that Asda's sales growth in the second-quarter was driven by record sales of frozen food, as well as strong growth in its premium own- label and organics offer. The grocer also delivered robust sales at its London stores, where service and availability have improved, and at southern coastal resort town stores, as more people holiday in the UK. Ms McKenna said: "The coastal stores this summer have traded phenomenally well."

She said that its frozen food sales were growing by about 20 per cent, adding "it was one of the strongest periods of growth in frozen food" since it was acquired by Wal-Mart in 1999.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Mortgage Advisor - OTE £95,000

£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...

SThree: Trainee Recruitment Consultant

competitive: SThree: Are you passionate about sales?Do you have a keen interes...

Recruitment Genius: Loan Adviser - OTE £30,000

£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Day In a Page

Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

EU 'family' needs to forgive rather than punish an impoverished state

An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

Gaza, a year on from Operation Protective Edge

The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
How to survive electrical storms: What are the chances of being hit by lightning?

Heavy weather

What are the chances of being hit by lightning?
World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

World Bodypainting Festival 2015

Bizarre and brilliant photos celebrate 'the body as art'
alt-j: A private jet, a Mercury Prize and Latitude headliners

Don't call us nerds

Craig Mclean meets alt-j - the math-folk act who are flying high
How to find gold: The Californian badlands, digging out crevasses and sifting sludge

How to find gold

Steve Boggan finds himself in the Californian badlands, digging out crevasses and sifting sludge
Singing accents: From Herman's Hermits and David Bowie to Alesha Dixon

Not born in the USA

Lay off Alesha Dixon: songs sound better in US accents, even our national anthem
10 best balsamic vinegars

10 best balsamic vinegars

Drizzle it over salad, enjoy it with ciabatta, marinate vegetables, or use it to add depth to a sauce - this versatile staple is a cook's best friend
Wimbledon 2015: Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Serena dispatched her elder sister 6-4, 6-3 in eight minutes more than an hour
Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created
No hope and no jobs, so Gaza's young risk their lives, climb the fence and run for it

No hope and no jobs in Gaza

So the young risk their lives and run for it
Fashion apps: Retailers roll together shopping and social networking for mobile customers

Fashion apps

Retailers roll together shopping and social networking for mobile customers
The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy