Photograph by Gordon McKinlay
Morrisons has declared a price war on its competitors, announcing £1 billion of price cuts over the next three years.
The announcement had a direct impact on the stock market, as supermarket shares tumbled as analysts feared that the price war would eat into profits at giants such as Tesco and Sainsbury’s. However, as Morrisons looks to grow their customer base with discounts, consumers will be the main beneficiaries as prices across the board are likely to fall as the other supermarkets hope to keep their custom.
The UK’s supermarket sector is currently stratified between Lidl and Aldi selling heavily discounted goods, Tesco Sainsbury’s, Asda, and Morrisons currently fighting for the majority of customers, while Waitrose have managed to earn themselves a very profitable niche of selling stables competitively, but making their money from selling mostly to an increasingly foodie middle class.
These opening shots of a price war from Morrisons, will likely be seen with concern from the discounts stores, while Asda, Sainsbury’s, and Tesco may wait an see how the price cuts change consumer behaviour before jumping in with both feet.
