More than a third of prices highlighted by Tesco last week to illustrate its £200m investment in pricing went up in price shortly before coming down, The Grocer can reveal.

Tesco last week kicked off its counter-offensive to Asda's 10% Price Guarantee by promising shoppers it would refund double the difference if their shopping would have been cheaper at Asda.

It also said it had cut the prices on 1,000 everyday grocery lines, worth £200m.

To help demonstrate the depth of the cuts, Tesco ­revealed the details of 18 lines it claimed would offer shoppers total savings of £10.18 if purchased from 28 February. However, The Grocer can reveal that seven of these lines have had significant price increases within the past three months [BrandView.co.uk].

Tesco said it had reduced the price of its Finest traditional pork sausages 454g from £2.79 to £2.58. The retailer had been charging £2.59 for this line as recently as 10 January. Uncle Ben's Express long grain rice has been reduced from £1.99 to £1.48, but the price only went up to £1.99 from £1.54 on 7 February.

One of the biggest savings Tesco claimed was on its super fit nappies economy pack midi54. This was reduced from £8 to £5.97, but the price on 3 January was £6.49. And the 10p per kilo saving on bananas was introduced on 7 February, three weeks before Tesco's campaign was launched.

"Customers will not be duped," said one rival. "Claims such as £200m of savings mean little to ­shoppers."

Tesco shoppers are nevertheless likely to see a significant decrease in prices. This week's Grocer 33 shopping bill at Tesco came to £53.49, but would have cost £5.78 more a week ago. While Asda remained the cheapest retailer overall, its total of £51.75 was actually 68p more expensive than last week.

A Tesco spokesman told The Grocer that all the price cuts were genuine and pointed out that even when the prices had gone up before this week's reductions all prices were still cheaper than the original price three months ago. He cited the increase in VAT, seasonal fluctuations in the price of fresh produce and spiralling commodity prices as reasons for the increases.

New Tesco UK CEO Richard Brasher said it had made the price cuts to help shoppers struggling with tighter household budgets.

Tesco said 6,000 shoppers checked the price of their goods in the first two days of its double the difference promise. It claimed 85% of those "have been 'reassured' that their shopping cost at least £5 less than Asda". The remaining 15% either matched price, or were an average of 65p more expensive.

Read more
Editor's Comment: Nobody better than Tesco at stealing rivals' thunder (5 March 2011)
Me-too: Tesco hits back with the sincerest form of flattery (5 March 2011)
Tesco launches new assault on Asda (28 February 2011)

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