Safeway steps up store price battle

Safeway yesterday raised the possibility of a fresh price battle between the big supermarkets when it announced a pounds 20m price promotion designed to dispel its image as an expensive store. The announcement came as Sainsbury's revealed plans to open more branches throughout the night on Fridays to offer shoppers more flexibility.

Safeway's Price Protected Initiative guarantees lower prices on 650 of its best selling branded and own-label products. Customers who find one of their products on sale cheaper at Tesco, Sainsbury or Asda will be given another one free - or a full refund. But the offer only applies to stores within three miles of the Safeway branch and within seven days of purchase.

A Safeway spokeswoman said: "Some customers still perceive Safeway to be more expensive, even though that is not true. This promotion is about redressing that mis-conception."

Rival supermarkets said they would not be responding with price campaigns of their own. Asda said customers were more interested in year-round low prices rather than one-off campaigns.

However, Frank Davidson, food retail analyst at HSBC James Capel, said the Safeway promotion could spark a price battle on fresh produce as many of the offers are in this area. "It could be produce price war mark two. If the prices are cheaper than Tesco and Asda, they will not going to allow that to continue."

Separately, Sainsbury is to open a further 18 of its stores all night on Friday, starting from this week. This brings the total number of all- Friday night stores to 47. A spokeswoman said 10.30pm to 1.30am was the busiest time with families and shift workers shopping.