by James Davey
LONDON (Reuters) – Britain’s Asda and Morrisons supermarket chains announced plans on Monday to cut prices of so-called essentials amid high inflation and deteriorating consumer sentiment.
Food prices in Britain rose 5.2% in the four weeks to March 20, the highest level since April 2012, according to sector data released last month. This is weighing on household incomes, which are facing the greatest pressure since at least the 1950s.
A survey by the Office for National Statistics (ONS) shows that nearly a quarter of UK households were already struggling to pay their bills even before increases in regulated energy prices took effect.
Asda, the third largest supermarket chain in Britain, has pledged to invest more than 73 million pounds (86.5 million euros) to reduce and “block” until the end of the year the prices of more than 100 items, including fruits and vegetables, meat and rice.
The group, owned since February 2021 by the brothers Mohsin and Zuber Issa as well as the private equity fund TDR Capital, specifies that prices should fall by an average of 12%
Before Asda, Tesco and Sainsbury, respectively number and two in the sector, had also taken initiatives in favor of lower prices.
Morrisons, the fourth player in the market, said for its part that it wanted to reduce its prices on more than 500 products considered essential, which represent 6% of its sales volume.
The group, owned since October by the American private equity firm Clayton, Dubilier & Rice, estimates that consumers will save an average of 13% on products such as eggs, coffee, cereals, chicken, sausages or even layers.
UK inflation hit a 30-year high of 7% last month and is expected to climb to almost 9% by the end of the year.
The survey by research firm GfK, published on Friday, shows that consumer confidence fell in April to an all-time low with an index of -38 after -31 in March.
(Report James Davey; French version Claude Chendjou, edited by Sophie Louet)
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