Supermarket giant Tesco recently announced its 'Big Price Drop', which sees them reducing prices on as many as 3,000 of its products. The company says it is investing 500 million in the project, claiming that it is responding to customers' desire for a more straightforward proposition when it comes to saving money.
Tesco's announcement, however, had been dismissed as a misleading ploy by the company's major rivals, who say it is designed to trick customers into thinking they're getting a better deal than they actually are.
A spokesman for Sainsbury's highlighted the fact that Tesco is scrapping its Clubcard 2 scheme, thus saving the company 350 million. As such, the true amount being invested in price cuts is actually 150 million. Tesco's move has been described as "classic smoke and mirrors" by Sainsbury's who claim the market leader is "giving with one hand and taking with the other".
In terms of market share, Tesco's closest rival is Asda. Asda released a statement declaring "no amount of spin can change the fact that our price guarantee ended price wars" (the company guarantees that a basket of groceries will be 10% cheaper than any competitors).
Morrisons was the only member of the so-called 'big four' that refused to comment on the situation.
Regardless of the posturing from Sainsbury's and Asda at present, many are predicting they will already be working behind the scenes on their own price cuts, as they don't want to lose the PR battle. This could lead to "the biggest price war in a generation," one commentator predicted.
One group alarmed by this prospect is the farming industry. In recent years, there have been significant increases to the costs farmers have had to shoulder, which means "they have precious little margin or scope to take any cuts," says the National Farmers' Union.
On the other hand, any price cuts will be welcomed by "hard-pressed consumers" according to Which? Magazine.
Tesco's announcement, however, had been dismissed as a misleading ploy by the company's major rivals, who say it is designed to trick customers into thinking they're getting a better deal than they actually are.
A spokesman for Sainsbury's highlighted the fact that Tesco is scrapping its Clubcard 2 scheme, thus saving the company 350 million. As such, the true amount being invested in price cuts is actually 150 million. Tesco's move has been described as "classic smoke and mirrors" by Sainsbury's who claim the market leader is "giving with one hand and taking with the other".
In terms of market share, Tesco's closest rival is Asda. Asda released a statement declaring "no amount of spin can change the fact that our price guarantee ended price wars" (the company guarantees that a basket of groceries will be 10% cheaper than any competitors).
Morrisons was the only member of the so-called 'big four' that refused to comment on the situation.
Regardless of the posturing from Sainsbury's and Asda at present, many are predicting they will already be working behind the scenes on their own price cuts, as they don't want to lose the PR battle. This could lead to "the biggest price war in a generation," one commentator predicted.
One group alarmed by this prospect is the farming industry. In recent years, there have been significant increases to the costs farmers have had to shoulder, which means "they have precious little margin or scope to take any cuts," says the National Farmers' Union.
On the other hand, any price cuts will be welcomed by "hard-pressed consumers" according to Which? Magazine.
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