Morrisons slashes prices as supermarkets vie for customer loyalty | Business

Morrisons has announced it is slashing the price of more than 900 products, as a week of retail trading updates is expected to show that Aldi and Lidl’s low prices helped the two German chains win the Christmas battle among supermarkets.

City trading updates this week from Tesco, Sainsbury’s, Morrisons, Marks & Spencer and Waitrose, along with reports by big retail analysts, are expected to indicate that Aldi and Lidl continued to grab an even bigger market share.

On Monday, Bradford-based Morrisons said it would continue to defend its market share by cutting an average 20% off “store cupboard favourites” such as tinned tomatoes, cereal, sandwich fillers, ready meals and multivitamins.

Andy Atkinson, its marketing director, said: “We’re listening to customers who are telling us that their budgets will be stretched in January, so we are cutting every penny we can on the essentials that will help them feed their families.”

Aldi said it would look at the price changes, but said it was confident that its stores “would still be cheaper to shop in”.

“We see this every January, and Morrisons is unlikely to be the last one to cut some specially chosen prices,” a spokesman said.

Retail observers will be keen to know whether Morrisons and the other traditional supermarkets have been able to hold on to customers in the face of huge pressure from their German rivals.

In early December the research group IGD said it expected UK shoppers would spend £21.6bn over the festive period, 2.4% more than the previous year. It also predicted Aldi and Lidl would continue to build on growth seen in Christmas 2017, when they increased sales by 16.8%.

Morrisons, Sainsbury’s and Tesco will reveal Christmas results on Tuesday, Wednesday and Thursday respectively.

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It is predicted that Morrisons will post a 0.5% rise in retail sales, Sainsbury’s flat sales or a small fall, while Tesco could surprise the market with a 1.5% Christmas sales increase.

Reports at the weekend suggesed Waitrose may have fared worst. Sainsbury’s could have also seen sales fall again. Over Christmas 2017, sales at Waitrose fell about 1.4%, while Sainsbury’s had a 0.4% fall. Both were reported against a the backdrop of a 3.8% increase in overall food sales.

Christmas shoppers are thought to have switched to Aldi and Lidl, attracted by their ranges of high-scoring wines and premium desserts. Heavy adverting in newspapers and elsewhere by the German chains is also thought to have bolstered sales.

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