TESCO IRELAND will kick off a supermarket price war this weekend in an effort to stop recession-struck customers deserting the grocery chain for discount retailers Aldi and Lidl.
Consumers are “feeling the pinch” and abandoning higher priced branded goods for cheaper in-house labels, according to Tesco Ireland chief executive Tony Keohane, who will today announce the launch of a €100 million price-cutting campaign.
The price drive will have 1,000 products grouped together under the Tesco Cash Savers range in a prominent store area from Sunday, as the retailer battles to keep consumers away from the discounters.
Mr Keohane said he expected that Tesco’s move, which includes a further 3,000 price cuts, could force a reaction from the marketplace. This in turn could prompt further cuts by Tesco.
“We will respond to any moves that are made,” Mr Keohane said.
He said Tesco’s price campaign was a strategic move for the company at a time when its customers are finding it more difficult to afford household staples.
However, any price cuts by grocery retailers will only partially reverse the steep price rises that have taken place over the past 18 months. Food prices fell marginally in June, but they are still 7.5 per cent dearer than they were a year ago, according to Central Statistics Office data.
Tesco kicks off new phase in price war: BusinessThisWeek
