Waitrose MD Mark Price has admitted the price war has hit profits, but insisted the supermarket was right to respond to competitors’ price cuts.

Profits at the upmarket grocer plunged by 9.4% to £145.2m in the six months to 26 July despite rising sales, as soaring investment in price and stores hit the bottom line.

“We have an absolute commitment to remain price competitive,” Price said, pointing to Waitrose’s commitment to match Tesco on non-promoted branded products and Sainsbury’s on own-label lines.

“Making sure we’re competitive has affected the investments we’re making; the amount we’re investing in price has gone up over the last year,” he added.

Waitrose’s sales in the six months to 26 July grew 4.1% to £3.15bn, while like-for-likes were up 1.3%, parent group John Lewis Partnership revealed in its first-half results. Overall investment at Waitrose stood at £220.2m, up from £120.4m last year

Aldi overtook Waitrose as the country’s sixth-largest retailer in August, according to Nielsen, but Price dismissed the idea Waitrose customers were shifting to the discounters.

“The real issue is that supermarkets in the UK have lowered their prices to be more competitive and we’re committed to giving our customers the same value,” he said.

Price also laughed off suggestions the retailer’s policy of giving its myWaitrose customers free coffee and newspapers had hit the bottom line. “We’ve been doing it for two years now and it’s certainly not a drain on profit,” he said.

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