Morrisons (MRW.L) is slashing the prices of over 500 of its products, including store-cupboard staples, fresh produce, frozen food, and household items in an attempt to compete with discount rivals.
The UK’s “big four” supermarkets —Tesco (TSCO.L), Sainsbury’s (SBRY.L), Asda (WMT), and Morrisons — have been under pressure to lower prices as they continue to lose customers to German discount rivals Aldi and Lidl.
Shares in Morrisons have fallen by 17% in the last year and it only just held on to its place in the FTSE 100 in this month’s quarterly review.
Morrisons sales were 2% lower than the same period last year, pulling its market share down from 10.4% to 10.2%, according to Kantar data for the 12 weeks to 23 February.
Sales at Tesco and Asda fell by 0.8% and 1.2% while Lidl and Aldi continued to win over British shoppers, with sales up 11.4% and 5.7% respectively.
Morrisons said it will be cutting prices by an average 15% and will focus on a range of its most popular items in order to make products “more affordable and prices stable for customers.” It said hundreds more reductions would be brought in over the next few weeks.
“We’re cutting the price of hundreds of our customers’ favourite items and are holding them low,” said Morrisons commercial director Andy Atkinson.
“These price cuts will help customers manage their budgets and make Morrisons even more competitive.”
The cuts include a 33% drop in the price of a kilo of British carrots to 50p and a reduction on British beef mince, now £1.50 for 500g.
Morrisons had a disappointing Christmas with a sales decline of 0.4%, while rival Aldi enjoyed a record-breaking Christmas as its festive sales broke through the £1bn mark for the first time.
Earlier this year Morrisons said it was axing 3,000 middle-management jobs to hire more shop floor staff in a cost-cutting move it said would allow it to “serve customers better.”
Tesco, Britain’s biggest supermarket, recently launched its Aldi Price Match campaign, pledging to cut prices on hundreds of products in an attempt to stem the customer exodus to discount rivals.