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What Does It Mean ? What does this all mean for the Ground Crew ?

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Old 01-01-2009, 08:34 PM   #1
Antaletriangle
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Join Date: Sep 2008
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Default Supermarket price war expected after Asda launches £1 range

http://www.telegraph.co.uk/finance/n...s-1-range.html

Asda has fired the first salvo in what is expected to be a New Year price war between the supermarkets, by offering range of staple goods for just £1.

By Harry Wallop, Consumer Affairs Editor
Last Updated: 7:20PM GMT 01 Jan 2009

It is part of a major offensive from the Leeds-based company, which includes it cutting prices on a thousand every-day lines from shampoo to frozen food "permanently."

Birds Eye Simply Cod fillets are being slashed from £2.49 to £1; a Mexican chilli ready meal is falling from £1.98 to £1; Walls sausages are being cut from £1.98 to £1 while nearly all Sure deodorants – previously costing between £1.84 and £1.62 – are now being sold for just £1.

The £1 range will be introduced as part of 1,000 "price roll backs", which will also see the supermarket offer 3 wines for £10.

The price cuts come into effect from today, January 2.

Tesco, Sainsbury's and Morrisons are all gearing up to respond within the next few days, with both Tesco and Sainsbury's hinting they were preparing their own discounts.

Tesco is already waging a petrol price war, boasting it is selling a litre of unleaded at a four-year low price of 82.9p, but is likely to start cutting its food prices.

Adam Leyland, editor of the leading trade magazine The Grocer, said: "Asda is always traditionally the first supermarket to come out in the New Year with a range of price cuts. And you can bet your bottom dollar Morrisons, Tesco and Sainsbury's will follow.

"This is a very difficult period for retailers. Everyone is spent out and feeling poor. They want to do their weekly shop in a supermarket they feel is on their side and offering low prices."

The supermarket price cuts come as the retail sector experiences what analysts describe as the toughest trading conditions for 30 years. They follow a period of unprecedented price cuts during December, with Tesco announcing a major half-price sale ten days before Christmas.

A third of all products on supermarket shelves will be discounted in some way, analysts say, compared with about 20 per cent a year ago.

The four major supermarkets have been hit by competition from Aldi and Lidl who have won over an army of middle-class shoppers with their sharply lower prices and small, but high quality, range of food.

Supermarkets have already responded by moving away from buy-one-get-one-free offers to lowering prices and selling smaller-sized and cheaper ready meals, with Tesco adopting a slogan of "Helping You Spend Less".

Andy Garbutt, retail director at consultancy PriceWaterhouseCoopers, said: "I think this year supermarkets are going to become even more price conscious. They have a crucial responsibility in how much consumers spend each week, with half all spend going on grocery shops."

Asda says it will cut about prices on 4,000 lines, but 1,000 of the cuts will be "permanent roll backs", which it claims are more significant than the traditional New Year price war announcements.

Andy Bond, Asda's chief executive, said: "2009 is going to be a very difficult year and I believe we have an obligation to help our customers through these tough times."

"They want to know when they spend their hard-earned cash that they're getting real value for money and not just a gimmicky price promotion."

Sainsbury's last night hinted heavily that it would try to match Asda's lower prices.

A spokesman said: "As a company we monitor prices of hundreds of staple products daily so we will obviously remain competitive. In addition we're obviously aware that customers are having to watch their spend so we have hundreds of price cuts and offers across the store."

Tesco, too, suggested it would not let Asda win yet more market share. "Tesco is second to none at giving customers great value. We have already dropped our prices on thousands of everyday lines and we have more to come," a spokesman said.
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