Asda has loaded the cannon for another salvo in the increasingly ferocious supermarket price war. The UK arm of the giant US retailer Walmart said yesterday that it will spend a further £500m cutting prices in its stores.
This comes on top of the £1bn spend promised by Asda in November 2013 for slashing prices over five years, and is the latest indication that the pressure on the “big four” groups from Aldi and Lidl continues to intensify.
“We must take radical action to win back our customers,” said the chief executive Andy Clarke, pointing to a lack of growth in the market and the rise of the German discounters.
“We expect that 2016 will be another year of intense pressure at a macroeconomic level, in addition to sales remaining under strain from price deflation, a continued competitive background throughout the sector, and radically changing customer shopping habits.”
Asda is due to provide an update on its latest quarter of trading on 18 February, at the same time as its US parent group reports.
It was the worst performer for sales among Britain’s leading supermarkets last year, with management opting to protect profit margins rather than chase top-line sales.
The other big groups – Tesco, Sainsbury’s and Morrisons – will all report on Christmas trading this week.
Join our new commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies