Sainsbury’s says it can beat supermarket price battle

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SAINSBURY’S has dismissed threats of a supermarket price war, saying that Morrisons’ £300m price-cutting spree is simply an attempt to catch up with its rivals.

Last week Morrisons announced price cuts of up to 60 per cent on 1,200 key goods, prompting reports of a supermarket price war.

But yesterday Sainsbury’s claimed that Bradford-based Morrisons is lagging behind its rivals on price.

Incoming chief executive Mike Coupe said: “If you look at what Morrisons have done, they’ve come fairly late to the party. So to some extent they are catching up with the market.”

Outgoing chief executive Justin King, who has presided over 10 years of growth at Sainsbury’s, said: “If there are significant changes in price - particularly brands, we’ll cover it off.”

In relation to Morrisons’ price cuts, he said: “We see a lot of what was in their announcement as catch up.

“The most significant promoter in this market has been Morrisons,” he said, referring to the supermarket habit of selling goods on promotion, which involves a high/low pricing strategy rather than sticking to constant low prices.

“Perhaps they are putting right a lot of things they hadn’t caught up with,” he added.

Last week Morrisons said it would cut the price of Huggies wipes by 60 per cent, slashing the price from £2.49 to £1.

Huggies Wipes have stayed at £1 in Asda since January 2013 while Sainsbury’s has swung between £1.50 and under £1.

Tesco has slashed and raised the price six times during this period, charging over £2.50 in some months and under £1 in others, while Morrisons has switched between £2.49 and £1.25.

Sainsbury’s reported a 5.3 per cent increase in annual profits to £798m yesterday, beating its main rivals although it warned of tough times ahead.

The big four grocers are all being outpaced by growth at discounters Aldi and Lidl. Upmarket chains Waitrose and Marks & Spencer are also gaining share.

Tesco, Asda and Morrisons have been cutting prices to try to combat the discounters.

Mr King said Sainsbury’s offer sets it apart from its rivals.

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