Waitrose takes on Tesco with price war on 1,000 products

SUPERMARKET chain Waitrose is to take on bigger rival Tesco by matching its prices on 1,000 branded products.

It is the first time the upmarket chain has adopted price-matching tactics associated with cheaper rivals such as Leeds-based Asda and Bradford-based Morrisons.

The supermarket said the move, which starts today, follows strong growth in its own-branded goods, which were launched in March 2009 and now make up 17 per cent of sales.

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Waitrose said products in the price match range will include staples such as Heinz Baked Beans and household basics like washing powder Persil.

Jonathan Pritchard, retail analyst at broker Oriel Securities, said Waitrose's margins would have to take a hit to roll out the plans.

"You can see from Waitrose's figures a month ago that the margins came under pressure. They are obviously taking the view that it's worth taking a hit on the margins in order to grow the top line," he said.

Price match items will be monitored twice a week to ensure they are kept in line with the commitment to match prices at Tesco, Waitrose added.

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The move comes at a competitive time in the food retail sector, with products such as bread and milk being discounted despite rising commodity prices.

Market leader Tesco, number two player Asda, number three Sainsbury's and number four Morrisons all cut the price of a sliced white loaf last month to about 30p from 47p, despite wheat prices being up to 60 per cent more expensive than three months ago.

Waitrose reported group sales of 4.5bn in the year to the end of January, a 25 per cent increase over the past two years. Operating profits for the year were 268m, while sales in the first half of this year rose 12 per cent.