BHS chief Green to plunge into store price war

RETAIL mogul Sir Philip Green is reportedly about to ramp up the pressure on Yorkshire-based Morrisons and Asda by plunging into the supermarket price war.

The billionaire businessman, who owns a raft of high street clothes shops including Topshop, told The Sunday Times that he plans to undercut rivals with the start of food sales at BHS department stores.

Sir Philip told the newspaper that the food would be about 10 per cent cheaper on branded goods than the big four supermarkets.

It comes as the major grocers – Tesco, Leeds-based Asda, Sainsbury’s and Bradford-based Morrisons – face a squeeze as discounters Aldi and Lidl gnaw away at their market share.

Morrisons recently announced that it would spend £1bn to slash prices over three years – after annual results showed it had tumbled into losses – while Asda is also spending heavily to make reductions.

Sir Philip’s BHS is to see its first two shops to offer food, in Staines and Warrington, open within days, according to The Sunday Times, with plans for about 140 such outlets.

He told the newspaper: “There’s no point in opening up and getting torn apart because we haven’t got competitive prices.

“We know what we’re going into – the most competitive food landscape for some time. On the basis that everyone is going into the high street and convenience, maybe it’s an opportunity. If you don’t buy a ticket, you can’t win the lottery.”

The openings will reportedly see sections of stores set aside for branded products such as bread and cakes, frozen items and soft drinks.

The idea that Sir Philip was considering food stores within BHS shops was floated publicly last year.

In November 2013, it was reported that Sir Philip was considering launching food stores within up to 150 BHS shops. The business used to sell food before he bought it in 2000.

Earlier this month, the loss of customers to Aldi and Lidl forced Morrisons to unveil a radical price-slashing plan to protect its northern heartlands.

Tesco has also announced plans to invest an additional £200m on cutting prices of basic products like carrots and cucumbers.

Morrisons saw its stores haemorrhage shoppers to Aldi and Lidl over Christmas when customers were lured away by the promise of cut-price lobster, free range turkey, quality Champagne and award-winning Christmas puddings. And it appears that since Christmas, the same shoppers have decided to stick with the discounters.

Market researcher Kantar Worldpanel said Morrisons’ sales fell 3.2 per cent in the 12 weeks to March 2 and its share of the market fell to 11.1 per cent from 11.8 per cent.

Earlier this month, Morrisons’ chief executive, Dalton Philips, announced plans to slash prices radically and lure shoppers back in store.

He refused to be drawn on just how much Morrisons will cut prices, saying the information is market sensitive, but he said the firm will close the gap on its German rivals.

The group will invest £1bn in total in price cuts over the next three years, including a £300m investment this year.

Morrisons, one of Yorkshire’s biggest employers and its biggest listed company, is facing stiff competition from arch rival Leeds-based Asda which outlined plans last November to invest £1bn in price cuts over the next five years.

Nobody was available for comment at BHS yesterday.