Tesco's 'Big Price Drop' angers rivals

23rd Sep 2011 10:18

Supermarket giant Tesco has revealed details of its 'Big Price Drop', a £500m price offensive which it claims will provide immediate help to struggling families."From Monday, Tesco will reduce the prices of more than 3,000 products that customers need to buy every day - such as milk, bread, fruit and vegetables. Future cuts will also focus on products that families need most," the supermarket announced.The firm will also remove its double Clubcard points promotion which is expected to save it over £300m, a move which brokerage Evolution Securities has praised, saying, "We have always felt that double points were not valued by consumers and it was an ineffective investment by Tesco."However, a spokesperson from rival retail titan Sainsbury said, "This is classic smoke and mirrors from Tesco, giving with one hand and taking with the other. Removing double Clubcard points will save Tesco £350 million.""It is no surprise to us that Sainsbury's price match policy, together with a stronger own brand offer, has forced Tesco to take this kind of action," the spokesperson said.Meanwhile, Wal-mart's Asda has lashed out, saying "Others can huff and puff as much as they like - shoppers want savings not spin; pounds in their pockets, not points on plastic."Nevertheless, Tesco chief executive Richard Brasher claims, "Clubcard will still be the best loyalty scheme in the market bar none. And, the Big Price Drop on the Nation's Shopping List will give families the help they need right now at the checkout. My message to our customers in these tough times is clear - we have listened and we are going to help."Evolution says that the fact that The Co-Op, Waitrose, Ocado, Sainsbury and others have "priced off Tesco" in the past shows that its price position is wrong. "Tesco is a dominant market leader with significant economies of scale and should be much cheaper than the competition." BC