Tesco Launches Price War on Asda
Tesco promises to pay “double the difference” on products found cheaper at Asda and cuts the price of over 1,000 products in order to regain market share.
UK supermarket Tesco will launch a £200 million price war against nearest rival Asda on Monday as it attempts to expand its market share lost to the recent Asda campaign.
Tesco, who has a 30% share in the UK market, will announce a ‘double the difference’ incentive on shoppers at the supermarket giant compared to the prices of products offered at Asda, currently second place in the UK market with 17% share. The price of 1000 products at Tesco will also be slashed.
The move comes also on the last day of long standing CEO Sir Terry Leahy retires, at the age of 55. Sir Terry has been an employee of Tesco since 1979 and has held the CEO position since 1997.
While Tesco has grown rapidly in the first 10 years of Leahy’s control, more recently market share growth has stagnated with the growth of Asda and Morrisons to blame. The company has fared better outside of the UK, however, with growth into a number of international markets.
Will the move bring life back into Tesco? Time will tell. But what it means for the consumer is that the effect of rising food prices will remain unseen, as each supermarket cuts their prices in order to attact customers.