Key Rivals Matching Asda In Price War

Key Rivals Matching Asda In Price War

While Asda has stated its aim to establish a 5%-10% price gap over its full-range rivals, new data suggests Tesco and Sainsbury’s are making it difficult for the struggling retailer to make progress with its strategy to win back shoppers.

The latest price comparison survey by trade magazine The Grocer, which looks at a basket of 33 everyday items, saw Tesco beat Asda by 54p in last week’s analysis.

Amid recent signs that food inflation is starting to ease, the cost of the selection of goods at Tesco and Sainsbury’s was 11% less month-on-month, while Asda’s was down 0.3% month-on-month

The Grocer noted that Tesco’s win was powered by several deep discounts, with its £81.04 basket featuring 11 price cuts.

Asda’s £81.58 basket offered the lowest price on 13 lines, with its EDLP strategy evident in several areas where it was cheapest without promotions.

Tesco’s selection was 1.4% less than Sainsbury’s (£82.18) and 6.1% cheaper than Morrisons (£86.31), where prices rose by 4.6% month-on-month, the highest of all retailers.

Last month, Asda trumpeted that it was cutting the cost of over 1,000 products as part of its drive to improve its price competitiveness. The retailer noted that the price cuts were intended to help ease the financial pressures currently being faced by many households as they head into the most expensive time of year.

The reductions were in addition to nearly 3,500 Rollback deals currently available in its stores.

Back in March, Asda signalled that it was willing to take a material hit to its profits in a bid to win back shoppers. However, price cuts since then have failed to halt its slide in market share, with Tesco and Sainsbury’s maintaining their momentum and the discounter’s making further gains.

Last month, Asda told suppliers at its annual conference in Leeds that it was launching a reset of its product offer “bay by bay” as it looks to accelerate its turnaround plan, which its Chairman, Allan Leighton, said was “30% complete”.

NamNews Implications:
* The key to price war success is perhaps not so much how shelf prices compare…
* …but how deep a retail rival can afford to go...
* ...and for how long...
* i.e. Tesco & Sainsburys, Aldi & Lidl may be in a better financial position than Asda & Morrisons…
hashtag

#AsdaPriceWar 

Tesco Ramping Up Whoosh Offer

 Tesco Ramping Up Whoosh Offer

Tesco’s rapid grocery delivery service, Whoosh, is starting to offer its customers the opportunity to do full-basket shops.

Order sizes for Whoosh deliveries had been restricted by what can be carried on the back of a moped. However, according to trade publication The Grocer, several hundred Tesco stores are seeing the upper limit on order size removed at certain times of day.

The report said that the full-basket offering has been enabled in part by Tesco’s delivery partner Stuart and its network of car- and van-driving couriers.

It is understood that the unrestricted Whoosh order size will typically be available to those customers scheduling for their order to arrive later the same day.

Cornelia Raportaru, the CEO of Stuart, told The Grocer: “If you’re closer to a large Tesco store, you could literally order anything you want.”

She added: “Our strategy has been to push on innovation and do things no one else is doing. One example is large baskets – the appreciation that [shoppers] want to order a large basket for same-day delivery and not have to wait two days. Today in the UK, there’s almost no one except Stuart that has that capability that is cost-effective on all sides and rewarding also for the courier partners.”

Tesco launched Whoosh in 2021, and it is now available in over 1,500 stores, covering around 70% of the UK population.

During its last financial year, Tesco’s online sales rose by 11.4%, driven primarily by volume growth, including a 2ppts contribution from Whoosh after a near 60% year-on-year jump in orders.

In a results call with analysts earlier this month, the group’s CEO, Ken Murphy, said: “It’s now a really meaningful business. It’s now growing at a really rapid rate. It has, we believe, some real competitive advantage that we want to exploit. So, you can see further investment in that. I think there’s quite a long way to go before we would say that model is mature.”

NamNews Implications:
* If the demand is there, ways will be found…
* With the unrestricted facility going to those paying for speedy (same day) delivery…
* …Stuart’s near-unique large basket facility gives Tesco a competitive edge * (and Innovator’s advantage) in building on its 11.4% growth in online.
* (An opportunity for suppliers in appropriate categories?)
hashtag#QCommerce hashtag#RapidDelivery hashtag#Tesco

Morrisons To Roll Out ESLs Across Supermarket Estate

 Morrisons To Roll Out ESLs Across Supermarket Estate

Morrisons is partnering with VusionGroup to roll out electronic shelf labels (ESLs) across all of its 497 supermarkets.

Whilst Lidl and several convenience store chains have adopted the technology, Morrisons will become the first of the traditional multiples to use ESLs across its core estate.

VusionGroup will install 10.8 million smart ESLs in Morrisons supermarkets to replace old-fashioned paper labels, providing accurate price and product information, and automating the shelf labelling process will free up staff time to focus on customer service.

Meanwhile, the ESLs will ensure its loyalty card offers are instantly communicated to shoppers at the shelf edge.

Morrisons highlighted that the new technology will integrate with its digital shelf-edge cameras to guide staff to product gaps, speeding up shelf replenishment. It will also integrate with e-commerce applications to make online picking easier and more accurate.

The supermarket noted that it plans to work closely with VusionGroup to explore how to leverage the data generated across various initiatives, “identifying new opportunities to enhance store operations and customer experience”.

Rolling out early next year the project will include an upgrade of the group’s in-store wi-fi infrastructure, delivering an improved in-store experience for its customers and supporting the digital development.

Morrisons stated this was the latest initiative in its digital technology programme, including the rollout of shelf-edge cameras, the introduction of a digital task management platform, and trials of AI-powered shopping trolleys.

Gordon Macpherson, Group Productivity Director of Morrisons:
“We’re excited to be the first large supermarket group in the UK to introduce digital shelf edge labelling across our entire supermarket estate and look forward to rolling out the technology in 2026.

This further underlines our commitment to modernising and digitising our business to deliver an enhanced shopping experience for Morrisons customers.”

Sébastien Fourcy, SEVP EMEA at VusionGroup, added: “This partnership with Morrisons is a cornerstone in our strategic roadmap towards 2027 and exemplifies our commitment to driving transformation at scale.

“By equipping all their supermarkets with our solutions, we’re not only delivering immediate operational benefits, but also laying the foundation for future innovation in omnichannel retail across the UK, which is a key market for us in the EMEA region.”

NamNews Implications:
* Should increase in-store service level, providing staff ‘freed up‘ by ESL will be redeployed in-store.
* Should result in an improved shopping experience.
* Should minimise shopper hesitation via improved shelf price-accuracy,
* Should ensure most shopper-whims/impulse needs are satisfied via on-shelf gap-filling,
* Should time permit, in a race against the clock.

hashtag#ElectronicShelfLabels hashtag#ESLs hashtag#Morrisons