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Sainsbury's announces new pricing

Sainsbury's has announced it is to lower the regular cost of its groceries and simplify its brand match scheme in a move designed to tackle consumer mistrust of promotions.

The grocer said it would lower base prices on thousands of lines within the food business while offering the same number of promotions and simplify its Brand Match programme in line with Asda's prices - even when they are on offer - from October 2.

It has pledged to simplify the customer experience by removing "confusing" price mechanics like fractions and percentages and consistently using round pound pricing for more products.

It would also adopt clearer and simpler shelf labels.

The supermarket said the move was designed to make it easier for shoppers to buy "what they like, when they like" without having to wait for specific products to go on offer.

It said the strategy was not about deepening the price war with competitors, but was instead designed to help consumers feel confident that they were not buying products on offer based on "fanciful" regular prices.

The retailer said suppliers would not lose out as a result of the strategy, arguing that customers were more likely to buy the products and the new structure would even out the peaks and troughs of regular prices and promotions.

It said the strategy was the result of 18 months of planning, and was permanent, adding that the supermarket had the support of suppliers such as Unilever.

A television, print and in-store campaign would explain the new pricing to customers.

Sainsbury's marketing director Sarah Warby said: "Customers tell us they find supermarket prices and promotions confusing and don't always know who to trust when it comes to getting good value.

"So we've taken this feedback on board and we're making it easier for customers to buy the products they love whenever they like, safe in the knowledge that they can get good value all the time on all products, without having to wait for promotions.

"We will continue to run as many promotions as before and they will be just as competitive, but customers now have the added reassurance that prices will always be great value at Sainsbury's, both on and off promotion."

Earlier this week, analysts Kantar Worldpanel reported that overall grocery market growth had slowed to a new record low of 0.3% as price inflation fell to zero.

It said consumers were benefiting from "intense" price competition between the grocers, and for the first time ever the average basket of everyday goods cost exactly the same as it did a year ago.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: "Sainsbury's would appear to be tapping into people's mistrust of promotions.

"It's interesting that they are referencing Asda, when in the past competitors have tended to reference Tesco.

"What remains to be seen is if Sainsbury's is really going to lower prices to the extent that customers notice.

"They say they are going to lower their prices while running as many promotions as before.

"That's quite a commitment to do both.

"The big danger is if their promotions don't hit home, it's a revenue risk for them.

"Everybody's always telling us about their prices.

"We won't know how big this is until we see the actual prices."

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