22nd February 2010
The majority of Asda and Tesco price cuts in the run-up to
Christmas were just 1p while many other products went up by 10p,
according to The Guardian.
An investigation by the newspaper revealed that two-thirds of
Asda's 800 price cuts on its website between 16 and 23 December
were just 1p, with only 20% giving a saving of more than 10p. At
the same time, 850 prices were raised, 53% of which were more than
10p.
Of Tesco's 930 price cuts on its website during the same period,
70% were just 1p. The supermarket giant also increased nearly 1,000
prices, 60% of which were increases of more than 10p.
Professor John Bridgeman, former director general of the Office
of Fair Trading, said supermarkets' pricing policies show a
"cynical manipulation of the language of value".
He said Asda and Tesco's heavy promotion of their price cuts
during the festive season damaged the credibility of their
marketing.
Two-thirds of Asda's 800 price cuts on its
website between 16 and 23 December were just 1p
"They are not in reality cutting prices but flexing prices,
making them go up and down and destabilising the price structure,"
Bridgeman said. "All they are doing is introducing so much
volatility no one can tell whether prices are going up or down. It
can only be to consumers' detriment and it does their image no
good."
In response to the findings, Asda said there was a
"straightforward" reason for the large number of 1p cuts. A
spokesman said: "We won't be beaten on price. So if a competitor
goes lower than us on a comparable product, even by just a penny,
we will always try and match or beat that price."
Tesco also dismissed the findings. In a statement, the company
said: "We do not manipulate prices in this cynical way. The
Guardian and Professor Bridgeman are using data we do not recognise
and his conclusion that we are deliberately confusing customers is
nonsense.
"This is a competitive market and prices are lower this year
than last year. Our customers know us, shop with us every week,
trust us and are not confused.
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