Rivals dismiss Asda's price promise as a 'gimmick'

A supermarket price war is looming after Asda promised to be 10 per cent cheaper than rivals.

Britain's second-biggest supermarket said it would give any customer who could find cheaper goods elsewhere a £10 voucher.

Asda hopes the promotion will increase its share of the fiercely competitive UK grocery market, which stayed flat at 17 per cent last year while the shares of Britain's biggest store chain, Tesco, and the third-biggest, Sainsbury's, rose.

The price promise builds on Asda's original price guarantee announced in April last year, which offered to refund customers the difference between products bought at its stores and those from cheaper rivals plus 1p.

Under the new deal, shoppers would therefore be refunded £10 if they found their £100 basket for the same price anywhere else. Customers who found their £100 Asda basket for £95 elsewhere would receive 10 per cent of £95 plus the original £5 difference – a total of £14.50.

Shoppers can check for refunds by tapping their receipt details into the Asda website the day after shopping to find out how much their basket would have cost elsewhere.

Asda said the guarantee would cover all of the 15,000 products listed on the MySupermarket price comparison site, including around 7,000 items subject to VAT. Its chief executive, Andy Clarke, said: "The Asda Price Guarantee cuts through all the phoney claims and headline numbers, and shows when it comes to saving people money, we mean business this year."

Tesco accused the US-owned supermarket of making "rubbish" claims, while Morrisons said its low prices did not rely on "gimmicks".

A Tesco spokesman said: "A direct comparison taken on Tuesday of the best prices on the 100 top-selling matched lines shows that Tesco is 5 per cent cheaper." Richard Hodgson, Morrisons' commercial director, said: "Unlike Asda, we're not in the business of gimmicks and stunts."

Supermarket chains constantly bicker over which has the cheapest prices. This week the Advertising Standards Authority upheld a complaint from Sainsbury's that Asda misled the public by stating in an advertisement for a toy sale that "everything is at least half price!" when only some toys were 50 per cent off.

But Asda regularly comes out cheapest in a weekly survey of 33 common items such as milk, apples and rice carried out by The Grocer magazine.