Supermarket price wars!

The cost of putting food on the table has been going up and up, putting further pressure on household budgets which are already stretched to the max.

However, the good news is competition among the major supermarkets has just stepped up a gear, meaning the cost of both your food shop and your fuel shop could be about to come down.

Battle of the supermarkets

Thanks to increasing pressure from discount stores Aldi and Lidl - which are able to offer lower food prices because they keep their overheads low - the big four supermarkets of Sainsbury’s, Tesco, Asda and Morrisons are starting to launch price-cut initiatives which could benefit us shoppers.

After announcing a huge fall in profits, Morrisons has revealed it will invest £1billion to bring down prices in its stores over the next three years. The launch of a loyalty card is also in the offing the next year.

Meanwhile, Asda plans to invest £300million in lowering prices this year, while Tesco is injecting £200million in to reducing the cost of fresh produce.

Sainsbury’s has fallen short of announcing an official cost-cutting campaign, but it has slashed prices of essentials including milk, bread and eggs. And, its Brand Match scheme, means the supermarket will have to keep up with the competition to some extent. Under the scheme, Sainsbury’s adds up the price of all brands in your basket and gives you a coupon for the difference if you would have paid less at Tesco or Asda (even if this is because of a special offer).

Asda also offers a similar Price Guarantee scheme which – if your Asda shop is not 10% cheaper than a comparable shop at Morrisons, Sainsbury’s, Tesco and Waitrose – will refund you the difference.

And Tesco’s Price Promise checks the prices of fresh food, own label and branded products in your basket against the prices at its rivals (Asda, Morrisons and Sainsbury’s) and will refund you any difference via a voucher.

Slashing the price of essentials

The supermarket's primary price war focus is on essentials. Tesco recently cut the price of four pints of milk to match Asda’s £1 deal, which then prompted Sainsbury’s to follow suit. Meanwhile, Morrisons has gone even better by cutting the price of four pints to 84p.

In addition, Tesco has reduced the price of a range of other popular items – the price of a whole cucumber has been reduced from 65p to 49p, for example, salad tomatoes from £1 to 69p, a bunch of salad onions from 75p to 49p, 1kg of carrots from £1 to 90p and the price of a pack of peppers from £1.75 to 99p.

And with Aldi’s Super Six offer you can get your hands on a range of fruit and vegetables for just 69p – the items included in this deal vary week by week.

Of course, all of these supermarkets also offer buy-one-get-one-free deals and bulk-buy discounts. Bear in mind though, these don’t always work out to be good value, which you can read more about in my article: Five supermarket traps to avoid. 

Fuel

It’s not just some foods that constitute ‘essentials’ for many UK consumers – it’s petrol too. That’s why fuel is another weapon in supermarket price war with Tesco and Asda both cutting the price of fuel at their forecourts pumps. Tesco has snipped 1p per litre off the cost of both petrol and diesel, while Asda has cut petrol costs by 1p a litre and diesel by 2p a litre. Further welcome news for motorists in this year’s Budget when the Chancellor announced the fule duty hike announced in September, will be canned.

In addition to its price cut, Tesco has also launched a new Clubcard Fuel Save scheme which will enable shoppers to save up to 20p off a litre. Every purchase you make in Tesco stores is added up and, when you hit £50 you will get 2p off a litre of fuel. For every further £50 you spend, you’ll get another 2p off, up to a maximum of 20p off a litre. This means that if, for example, your average monthly spend at Tesco was £300 and your average fill-up was 50 litres, you could save £6 a month. Note you will need a Tesco Clubcard to take advantage.

Morrisons, meanwhile, offers its own Fuel Save scheme but this requires you to buy gift cards (for high street shops or restaurants, for example) in store. For every £10 you spend on gift cards, you will receive 1p off a litre of fuel.

Sainsbury’s is not currently offering a fuel deal, but keep an eye out for its 5p off per litre offer when you spend £50 or more in one transaction which crops up every so often.

Supermarket credit cards

Don’t forget that Tesco and Sainsbury’s also offer credit cards which allow you to build up points for their respective Clubcard and Nectar schemes.

The Tesco Clubcard credit card for purchases, for example, offers 18 months at 0% on purchases and also doubles as your Clubcard. This means you’ll earn five Clubcard points for every £4 you spend in Tesco stores and five Clubcard points for every £4 you spend on Tesco fuel. You’ll also get one Clubcard point for every £4 you spend elsewhere.

And the Sainsbury’s Nectar credit card offers 0% for 16 months on both purchases and balance transfers (subject to a 3% fee). With this card you can collect double Nectar points on your Sainsbury’s shopping, as well as collect two Nectar points for every £1 spent on Sainsbury’s fuel and one Nectar point for every £5 spent on your card elsewhere. You can read more about this card in Mark Hooson’s article.

Please note: any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

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