The GROCER 100: june 13, 2005 to august 29, 2005
Asda’s determination to retain its crown as the cheapest grocery retailer is paying off, with The Grocer 100 survey showing it has maintained a slender lead over Tesco for the past 12 weeks.
The two rivals are embroiled in a bitter price war, which has heated up considerably in recent months. Only last week a Goldman Sachs survey of 50 products added fuel to the flames by stating Tesco was the country’s cheapest retailer.
But The Grocer’s barometer, which is compiled by specialists ESA, suggests Asda remains in pole position on price.
Our secret basket comprises a mix of 100 own-label goods and brands from across the major grocery categories including chilled, frozen, ambient, dairy, meat, fish and fresh produce.
Although Tesco and Asda were neck and neck at the start of the 12-week period under review, Asda has gradually pulled away from its rival. Our research shows it has been 1.4% cheaper on average than Tesco over the past three months.
The average price of Asda’s 100-item basket was £169.53 between June 13 and August 29, compared with £171.90 over at Tesco.
The results will be great news for Asda, which only last week pledged to cut £130m off prices and introduced more bogofs.
But experts predict Tesco will continue to close the gap. Shore Capital retail analyst Clive Black said: “I would be surprised if Tesco allowed such a major differential to exist for long.
“There is certainly no sign of a slackening to come in the price wars. With the multiples’ price-cutting initiatives set to continue, the competitive retail environment certainly won’t be getting easier any time soon.”
The latest results of The Grocer 100 research also show how Sainsbury continues to fight harder in the pricing fray. With an average basket price of £175.05, Sainsbury is now just 3.3% more expensive than Asda.
It recently stepped up its pricing activity with a campaign called Ways to Save.
And in The Grocer 33 survey this week, Sainsbury has the cheapest shopping basket for the third week in a row.
Morrisons, too, is maintaining its competitive edge - with an average basket of £174.77 putting it in third place.
However, Sainsbury is closing the gap on Morrisons and the battle between the two retailers looks set to become another interesting tussle.
Not surprisingly, the intense competition between the major multiples continues to fuel deflation in the grocery market, according to The Grocer Price Index. Our latest monthly index reveals that prices on a range of commonly-bought grocery items fell by 0.4% year-on-year. The research shows prices fell by 0.5% month on month.
When we last published The GPI, in August, we found prices had risen by just 0.4% month on month - despite the huge jumps in raw material prices faced by suppliers and retailers.
>>p24 The Grocer 33
Gaelle Walker
Asda’s determination to retain its crown as the cheapest grocery retailer is paying off, with The Grocer 100 survey showing it has maintained a slender lead over Tesco for the past 12 weeks.
The two rivals are embroiled in a bitter price war, which has heated up considerably in recent months. Only last week a Goldman Sachs survey of 50 products added fuel to the flames by stating Tesco was the country’s cheapest retailer.
But The Grocer’s barometer, which is compiled by specialists ESA, suggests Asda remains in pole position on price.
Our secret basket comprises a mix of 100 own-label goods and brands from across the major grocery categories including chilled, frozen, ambient, dairy, meat, fish and fresh produce.
Although Tesco and Asda were neck and neck at the start of the 12-week period under review, Asda has gradually pulled away from its rival. Our research shows it has been 1.4% cheaper on average than Tesco over the past three months.
The average price of Asda’s 100-item basket was £169.53 between June 13 and August 29, compared with £171.90 over at Tesco.
The results will be great news for Asda, which only last week pledged to cut £130m off prices and introduced more bogofs.
But experts predict Tesco will continue to close the gap. Shore Capital retail analyst Clive Black said: “I would be surprised if Tesco allowed such a major differential to exist for long.
“There is certainly no sign of a slackening to come in the price wars. With the multiples’ price-cutting initiatives set to continue, the competitive retail environment certainly won’t be getting easier any time soon.”
The latest results of The Grocer 100 research also show how Sainsbury continues to fight harder in the pricing fray. With an average basket price of £175.05, Sainsbury is now just 3.3% more expensive than Asda.
It recently stepped up its pricing activity with a campaign called Ways to Save.
And in The Grocer 33 survey this week, Sainsbury has the cheapest shopping basket for the third week in a row.
Morrisons, too, is maintaining its competitive edge - with an average basket of £174.77 putting it in third place.
However, Sainsbury is closing the gap on Morrisons and the battle between the two retailers looks set to become another interesting tussle.
Not surprisingly, the intense competition between the major multiples continues to fuel deflation in the grocery market, according to The Grocer Price Index. Our latest monthly index reveals that prices on a range of commonly-bought grocery items fell by 0.4% year-on-year. The research shows prices fell by 0.5% month on month.
When we last published The GPI, in August, we found prices had risen by just 0.4% month on month - despite the huge jumps in raw material prices faced by suppliers and retailers.
>>p24 The Grocer 33
Gaelle Walker
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