Asda makes bold price changes and here’s how it’ll affect you | Personal Finance | Finance

In a bold move that has shaken the UK’s grocery landscape, Asda has slashed prices on 1,500 products and cut fuel costs by 4p per litre.

The supermarket’s aggressive price cuts are part of its new commitment to deliver unbeatable value for customers, with nearly 10,000 products now discounted across its entire range, marking a massive £4 billion hit to the market.

Asda, under the leadership of Executive Chairman Allan Leighton, has reignited its famed “Rollback” campaign, reducing prices by up to 45% on selected products.

The move follows a turbulent period for the retailer, which saw its market share tumble from 14.6% in 2021 to just 12.6% today.

However, Leighton has vowed to reverse the slump, launching the biggest pricing investment since his first tenure in the 1990s. “This will be the biggest commitment to Asda Price and Rollback since I first launched them,” said Leighton, signalling a return to the retailer’s roots as a ruthless price-cutter.

SOME OF THE PRICE CUTS

Asda’s price cuts have sent shockwaves through the supermarket sector, particularly among its biggest rivals. Tesco, Sainsbury’s and Marks & Spencer all saw their share prices plummet in response to Asda’s aggressive moves.

Tesco was hit hardest, with shares dropping more than 12%, while Sainsbury’s and M&S saw declines of 8.5% and 7.5%, respectively. The price war has triggered fears among investors that supermarket profits could take a major hit as the sector braces for a new wave of discounting.

Fuel prices have also become a battleground. Asda’s 4p per litre reduction in petrol and diesel prices has forced competitors to rethink their own pricing strategies. The move undercuts rival supermarkets, triggering calls for other chains to follow suit. “The longer oil stays around the $70 mark, the more likely we are to see petrol hit its lowest price in four years,” said RAC spokesman Simon Williams, hinting that the competition could intensify further if Asda’s pricing strategy proves successful.

The retail world has been taken by surprise by Asda’s newfound aggression, particularly after its 2021 acquisition by private equity firm TDR Capital and the Issa brothers, which led to stagnating prices across the sector. However, experts believe Leighton’s strategy could be a game-changer. “Leighton knows exactly how to make Asda a powerhouse again. His strategy is bold, but the key question is whether it will be enough to shift customer loyalty back in Asda’s favour,” said retail expert Natalie Berg.

While Asda’s prices are now undercutting rivals across grocery and fuel, Tesco and Sainsbury’s remain formidable players. Tesco, for example, is raising wages by 5.2% to £12.64 an hour, which could eat into its margins as it tries to balance its books. National insurance changes and rising operating costs have further squeezed supermarket profits, making the price war even more dangerous.

Clive Black, a retail analyst, warned that while Asda’s aggressive approach will certainly stir the pot, Tesco and Sainsbury’s have stronger customer bases and deeper pockets. “The supermarket price war is far from over. This is just the beginning of what could be a prolonged battle for market dominance,” Black said.

For shoppers, the price cuts are a welcome relief in an era of rising costs. Asda’s “Rollback” program, now fronted by fitness guru Joe Wicks, has already made waves with its extensive list of discounted products. As the price war rages on, consumers can expect even more savings in the coming months – but experts agree that the competition among the UK’s supermarket giants is only heating up.

With billions at stake, the real question is: will the price war end in a race to the bottom, or will Asda’s gamble pay off, restoring its status as the UK’s top-value supermarket? Only time will tell.