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Sunday, 17 February, 2002, 08:50 GMT
Tesco starts supermarket price war
tesco
Tesco is cutting the prices of 1,500 products by �70m
Shoppers are set to cash in as the four leading supermarket chains prepare for their fiercest price war yet.

Market leader Tesco has announced it is cutting the cost of 15,000 items on its shelves - offering customers a total saving of �70m - compared with January 2001 prices.

The announcement follows a year of price cuts that have already left the store's shoppers with an extra �200m in their pockets.

But the chain's main rival, J Sainsbury, which lost its number one spot to Tesco in 1995, says shoppers should not fall for short-term price cuts.


Tesco and Asda are the price-cutters and they are the ones who have grown their businesses during the past five years

Tesco marketing director Tim Mason

Tesco, along with the UK's third-ranked retailer, Asda, believes in offering customers low prices across the range of goods they stock.

But Sainsbury and Safeway, the UK's number four, rely on bigger discounts on selected items.

A spokesman said Sainsbury's own wide selection of special offers - including buy-one-get-one-free deals on 50 different products - reflected a "constant, long-term approach to cutting prices".

And although the store has cut the cost of 3,000 items during the past year, managing director Stuart Michell says its customers consider quality and service to be "more and more" important.

But Tesco marketing director Tim Mason says most shoppers are looking for low prices first and foremost.

He told BBC News: "Tesco and Asda are the price-cutters and they are the ones who have grown their businesses during the past five years.

"Sainsbury and Safeway have tried different things and their businesses have not grown as fast."


It all depends on the products you pick - and that is where the confusion comes in for the consumer

Clive Beddall
The Grocer

Tesco director John Gildersleeve says its price-cutting policy is also "helping keep a lid on inflation".

But Clive Beddall, editor of retail magazine The Grocer, told BBC News that during the past five years Asda's prices have been consistently lower - beating Tesco into second place.

That assessment is based on the cost of a "typical" weekly shopping basket containing 33 different items.

But as Mr Beddall explains: "It all depends on the products you pick - and that is where the confusion comes in for the consumer."

See also:

30 Jan 02 | Business
Sainsbury to create 4,000 jobs
21 Nov 01 | Business
Sainsbury's profits edge higher
12 Jan 01 | Business
Sainsbury's: 'Recovery on track'
14 Jan 02 | Business
Sainsbury's enjoys strong sales
15 Jan 02 | Business
Tesco loses sales edge
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