Supermarket price war: Will it save you money?

1 December 2011

With wallets being squeezed and Christmas just weeks away, the local supermarkets have become a battleground for your hard-earned cash.

If you believe the propaganda, the price war - the frantic bid to be cheaper than the competition - is hotting up. But will you really get a better deal on your shopping, or are accusations of underhand tactics true?


The major supermarkets would have us believe that they're slashing millions of pounds off the cost of our groceries. At best, the promises are confusing. But at worst they could be considered deceptive.

The threat of legal action is now hanging over four of the country’s biggest supermarkets after investigations from BBC Panorama highlighted underhand tactics such as “Wow!” prices that are anything but and “New Low Prices!” that are higher than the old ones.


"It is not just the occasional mishap here. There are repeated examples with many, many products in different locations with different supermarkets and all of them seem to be doing the same thing. So there is a potential for prosecutions to be brought against all of them," says consumer law expert Deborah Parry.

"Any price cuts are clearly great for the consumer, but we would advise caution," says James Foord, vice president of business development for shopping site

"There are literally thousands of different offers, price cuts and deals on at any one time across all the supermarkets and the deals are constantly changing. People must be confused, with no idea where to find the best prices."

To help you, here's our lowdown on the various supermarkets and where the best deals are to be had.


Launching its campaign with huge fanfare in late September, Tesco has cut the price of 3,000 products, including 1,000 Tesco own-brand products, as part of its Big Price Drop campaign. The re-pricing on items such as tomatoes (down 40%) and whole chickens (down 25%) is costing the global giant £500 million, it claims.

But with up to 50,000 different products available in a typical large store, critics aren't convinced that shoppers will always feel the benefits.

A recent basket test made up of 33 branded and own-brand items - including items such as cheese, bread, potatoes, pasta sauce and beer - by trade publication The Grocer - suggested prices had actually gone up by £1.34, to £58.37 for a weekly shop. That made it £4.67 more expensive than Asda, and 79p more expensive than Sainsbury's.


Sainsbury's has pledged to match Tesco and Asda prices on 12,000 branded items through its Brand Match scheme. Once you've filled up your trolley and arrived at the checkout, the retailer will instantly calculate the cost of the branded grocery goods compared with the cost of the same branded basket at Asda and Tesco.

If the basket would have been cheaper at either store, including promotional deals, shoppers will immediately receive a coupon equal to the value of the difference.

10 ways to help you save at the supermarket

That all sounds great, but you'll have to spend a minimum of £20 and redeem the coupon within two weeks, and online shopping is not covered by the promotion. And, once again, with a large Sainsbury's store typically offering 30,000 products, we're still only talking about 40% of the items you could be stocking up on.


The budget supermarket's response to the so-called supermarket war has been to create the M Kitchen convenience range as part of a broader move to overhaul its own-brand range, including more than 11,000 new or improved items.

Although not directly engaging in the price war, analysts suggest the move is a bid to cut into Tesco and the Co-op's own-brand business and increase its share of the market.

In fact, the latest figures from Kantar Worldpanel - a company that researches grocery market share - show that Morrisons is the only one of the big four supermarket chains to increase its market share. Its profits are up 8%, according to the supermarket's half-year results to 31 July 2011.

"Morrisons posted the strongest growth of the big four, but all of these retailers are responding to stretched household budgets with promotional initiatives," says Edward Garner, a director at Kantar.


Launched in April last year, Asda's Price Guarantee doesn't match individual prices directly, but promises that if your basket or trolley isn't 10% cheaper than the equivalent from Tesco, Sainsbury's, Morrisons and Waitrose it'll refund the difference.

Asda's guarantee covers the broadest range of the competition, and is a seemingly straightforward blanket offer across the store, rather than a comparison of a small number of products.

Christine Cross, chief retail adviser for PricewaterhouseCoopers, says: "The cheapest for everyday shopping is Asda with its lower price campaign, with Tesco and Morrisons next cheapest on a weekly basis. Sainsbury's is always fourth."

To take advantage of the Asda deal, you'll need to have bought at least eight items at once, and at least one needs to be comparable - exactly the same product.

And exactly means exactly. You won't be able to compare Asda's 1kg of leaf spinach with Tesco's, for example, because Asda's is chopped and Tesco's isn't. Nor can you compare Asda's Little Angels Cotton Soft Baby Wipes with Sainsbury's Little Ones Eco Baby Wipes because Asda's aren't biodegradable.

Moreover, you won't actually receive the saving until your next shop, prompting you to go back again and again. Asda also requires you to wait until the following day to check your prices online, having registered for the service.

If you do, you'll also have provided the supermarket with valuable data on your spending habits, alongside your personal information. And, of course, if you don't have internet access you won't get anything.


Even the posh shops are getting in on the act. Waitrose has been matching 1,000 of Tesco's branded items since September last year, at a cost of £19 million, according to the retailer - though a typical Waitrose store will stock some 18,000 items.

Meanwhile, not to be confused with Waitrose online, the online food retailer Ocado promises to price-match all Tesco's branded products. But both deals refer only to Tesco's standard retail price, so don't expect to see the same prices for promotional or multi-buy deals otherwise available from Tesco.


So is the price war likely to be hotting up as Christmas approaches? Experts seem to think so. Kantar's Garner says: "Shoppers are trading down and retailers are promoting hard to convince their shoppers they are doing their best to combat price rises."

Sarah Cordey, spokesperson for the British Retail Consortium, agrees: "Retail is always a very competitive sector. At a time when household budgets are under great pressure, retailers are in even greater competition with each other for the consumer spending that is available.

"Christmas is always crucial to the retail sector, but is particularly so this year, after a flat 12 months, and the festive period is likely to determine tactics for next year."

This is good news for consumers, but shoppers should watch out for supermarkets' tricks.

Foord warns: "If something is on offer, don't assume that is the best possible deal around. Bulk buying and buying bigger packs can save money, but aren't necessarily cheaper every time. Compare prices by weight and individual units.

"Also, although trading down to a supermarket's own brand could save you money without compromising on quality, an offer on a branded product means you can't assume it will always be cheaper."

To take advantage of the increased competitiveness among supermarkets, always compare prices (you can do so at, and also consider discount stores such as Aldi, Lidl and Iceland that can offer great value for money on some products.

And finally, eat what you buy. UK families chuck out an average of £610 worth of food every year, according to government figures - a total of 6.5 million tonnes of rubbish. Avoiding this would be the best way to shave off a big chunk of that shopping bill.

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