Asda and Morrisons cut prices as supermarkets fight for customers

theguardian.com:

Asda has said it will spend £73m to cut or freeze prices on 100 products, while Morrisons says it will cut prices on 500 products as Britain’s supermarkets fight to keep customers amid rising inflation.

The Morrisons products subject to price cuts represent 6% of its total sales, and include items such as eggs, cereal, cooking sauces, chicken and sausages. Asda said its price reductions would be on fresh fruit and vegetables, fresh meat, rice and noodles.

Recent increases in oil prices, global supply chain disruption caused by coronavirus lockdowns and Russia’s war on Ukraine have fuelled soaring inflation across the world, putting a strain on household finances.

British supermarkets are trying to preserve their market share, and the big four – Tesco, Sainsbury’s, Asda and Morrisons – are watching the growing competition from the German discounters Aldi and Lidl. Although there are concerns over the economy’s momentum, supermarkets are also competing for staff amid a tight labour market.

Asda on Monday said it will increase pay for workers to £10.10 an hour from July, matching earlier increases from Tesco and Lidl.

Asda had faced criticism from the GMB union for having the lowest-paid workers of the big chains, at £9.66 an hour. Nadine Houghton, a GMB national officer, said the pay increase was “fantastic news”.

“Retail workers, predominantly women, face the reality of living with low pay every day,” she said. “Employers everywhere need to step up and properly reward these key workers who keep our high streets running.”

Asda’s price-steadying measures will coincide with the launch of its new “Just Essentials” products to replace its budget “Smart Price” range. Asda is spending £45m on introducing the products from next month,