Waitrose vows to match Tesco prices
Supermarket Waitrose has announced plans to take on rival Tesco by matching its prices on 1,000 branded products.
It is the first time the upmarket chain has adopted price-matching tactics associated with budget rivals such as Asda and Morrisons.
The supermarket said the move, which starts on Monday, follows strong growth in its own-branded goods, which were launched in March 2009 and now make up 17% of sales.
Waitrose said products in the price match range included staples such as Heinz Baked Beans to household basics like Persil.
Jonathan Pritchard, retail analyst at broker Oriel Securities, said Waitrose's margins would have to take a hit to roll out the plans.
He told the Sunday Times: "You can see from Waitrose's figures a month ago that the margins came under pressure. They are obviously taking the view that it's worth taking a hit on the margins in order to grow the top line."
Price match items will be monitored twice a week to ensure they are kept in line with the commitment to match prices at Tesco, Waitrose added.
The move comes at a competitive time in the food retail sector, with products such as bread and milk being discounted despite rising commodity prices.
Tesco, Asda, Sainsbury's and Morrisons cut the price of a sliced white loaf last month to about 30p from 47p, despite wheat prices being up to 60% more expensive than three months ago.
Waitrose posted group sales of £4.5 billion in the year to the end of January, a 25% increase over the past two years. Operating profits for the year were £268 million, while sales in the first half of this year rose by 12%.