Tesco’s ‘Aldi Price Match’ campaign has taken a fresh twist – with Tesco now raising the price of matching lines to keep up with increases at Aldi.
In a sign of Tesco’s determination not to let the pressure off Aldi despite surging inflation, it’s emerged that the discounter has blinked first, raising prices on some key price-matched lines ahead of an identical increase by the supermarket giant, and leaving Aldi briefly more expensive than Tesco on the lines in question.
On 24 February, an ‘Aldi price matched’ 660ml bottle of San Miguel lager was £1.65 at Tesco – 14p cheaper than at Aldi. A four-pack of 440ml cans of Foster’s was £3.49 at Tesco and £3.75 at Aldi.
On Tuesday of this week (22 February), a 500ml bottle of Doom Bar Amber Ale was £1.49 at Tesco and £1.59 at Aldi. By Wednesday, Tesco had raised its price by 10p to match Aldi.
Examples are not limited to alcohol. A 300g tin of Aldi Four Seasons Mushy Peas was this week 25p while Tesco’s ‘matched’ 300g tin of Grower’s Harvest Mushy Peas was still 22p.
IPLC UK partner Paul Stainton spotted the rises at Aldi after monitoring the price of about 70 lines at each retailer since the start of the year. Other Aldi lines to have risen first include its 300ml Cowbelle British Single Fresh Cream, from 75p to 79p, ahead of the same rise for Tesco’s ‘matched’ 300ml Creamfields Single Cream.
Tesco is determined to keep a lid on inflation to ensure the discounters do not accelerate market share gains as they did when food prices spiked following the 2008 financial crisis, and again in 2010/11, with APM a crucial battleground.
Stainton said Tesco was effectively using its wider mix of margins in a game of chicken with Aldi.
“Tesco is trying to put the squeeze on Aldi by not moving many of the key APM items up, knowing the impact of not moving will be higher on Aldi due to their limited range and inability to manage margin mix between brands and private label.”
Tesco, meanwhile, could more easily balance thin margins in its price matching campaign with wider ones elsewhere, he said.
Aldi disputes the accuracy of Tesco’s price match claims on private label products, arguing its own are higher specification and would be more appropriately compared with a more expensive line at Tesco.
“We are the lowest-priced supermarket in Britain and our customers always pay less for their shop with Aldi,” said an Aldi spokesman.
“The most recent Grocer 33 basket comparison found Tesco was 16% more expensive than Aldi and our customers know that those differences add up to big savings every time they shop with us.”
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