The UK’s fourth largest supermarket Morrisons is cutting its prices of 200 items by up to a third. The firm has said that many everyday products will be cut in price and this is an attempt to fight the battle between the big four supermarkets and discounter stores such as Aldi and Lidl.
Aldi and Lidl has become a main supermarket for many and Morrisons, Tesco, Sainsbury’s and Asda are paying the price for not only the rise of these discounted supermarkets, but also the rise of online shopping. Morrisons has been hit particularly hard and plans to cut the price of four pints of semi-skimmed milk by 11%, pricing it at 89p whilst also lowering the price of some bread brands by around 21%.
2014 was a bad year for Morrisons as its profits halved, which meant that this was their lowest level for eight years. Despite this, the supermarket said it would commit a billion pounds over the next three years to lowering prices, which should make consumers happy. This was a move that rival firm Asda also made, as it committed £300 million to lowering prices in the first three months of the year. Not only this, but Sainsbury’s continues to invest £150 million to reduce the cost of 1,000 products and Tesco is dropping prices on 2,500 products as well.
Compared with 2014, a typical basket of day-to-day items is now 2.1% cheaper and all the major retailers offer cheaper like-for-like goods, according to analyst Kantar Worldpanel.
Although the big four supermarkets are doing all that they can to stay in power and compete in an ever-growing market, Aldi and Lidl are gradually gaining more of the market share. Lidl has captured 3.9% of the market share, which is a new record high for the company and Aldi has increased its share to 5.4%, according to Kantar figures up to 24th May.