What ‘big drop’? Tesco prices go UP

IT HAS been promoted by the supermarket giant Tesco as the biggest price-cutting campaign in 25 years.

But just a week after the launch of the Big Price Drop, a random selection of items from the store showed costs had actually gone up.

A weekly price-tracking survey by trade magazine the Grocer showed a selection of 33 items came in at £58.37 – £1.34 more than they would have cost a week earlier.

This is despite Britain’s biggest supermarket chain launching a £500 million price-cutting campaign last Monday.

“Tesco slashed the price of 3,000 items earlier this week, but you would not know it from this week’s pricing survey results,” the trade journal said.

The retailer was only the third-cheapest supermarket for the 33 products on the shopping list, coming in £4.67 more expensive than Asda and 79p more than Sainsbury’s.

The Grocer said: “Tesco will not be happy. Despite launching its £500m Price Drop campaign, it has lost out to Asda in this week’s Grocer 33.

“To add insult to injury, its basket cost £1.34 more than an identical basket would have cost last week – the biggest price hike of all the supermarkets.

“The irony will go down extremely well at Asda. In stark contrast to Tesco, its basket cost £1.49 less than it would have done last week.

“It also had the highest number of exclusively cheapest products, with seven, and its basket cost £4.67 less than Tesco’s.”

The Grocer 33 is made up of a mix of 33 branded and own-label products and includes items such as cheese, bread, potatoes, rice, meat, beer and pasta sauce.

The items are kept a secret until after each week’s survey and changed every time, so the supermarkets have no chance of fixing the results.

Critics have questioned whether the timing of the Big Price Drop – described by the chain as the biggest price-cutting campaign in 25 years – was a “cynical stunt”’ when they are losing market share to discounters like Aldi and Lidl.

Whereas Tesco was £1.34 more expensive for the basket of goods than the previous week, Morrisons was £1.08 more expensive, Sainsbury’s was the same price and Waitrose was 30p cheaper. Asda was £1.49 less expensive than the previous week.

Items that had risen in price included a four-pack of Birds Eye Chicken Pies, which were 69p more expensive, own-label Parma ham slices, which were 63p more expensive, and own-label cherry tomatoes, which had gone up by 8p.

A spokeswoman for Tesco said: “The Big Price Drop is a £500m investment which is real and substantial – cutting prices on more than 3,000 essentials that customers need every day – and we are happy to be judged by the millions of customers buying these products.

“On branded products, the reductions in price are as high as 30 per cent for some products.

“More customers are turning to own-label brands, and in some cases Tesco brand products are now over 50 per cent cheaper than the brand.

“We are confident that this is the right approach to give our customers the help they need in these tough times.”

Tesco is expected to post its weakest underlying UK sales for about 20 years on Wednesday.

It is forecast to post a fall in UK like-for-like sales, excluding fuel and VAT, of between 0.5 per cent and 2 per cent over the 13 weeks to 27 August, compared with an actual fall of 0.1 per cent in the previous quarter.