Price wars threaten to reshape landscape of supermarkets

 In Aldi, International, Tesco
When Wm Morrison announced that it would invest £1bn cutting prices over the next three years, it threatened to turn the regular skirmishes between Britain’s big grocers into trench warfare in the supermarket aisles.
The so-called big four – Tesco, Asda, J Sainsbury and Morrison – have sparred over the past five years, trying to win cash-strapped customers as the economy turned down and the volume of food bought fell for the first time in living memory.
But seasoned supermarket watchers say this time the situation is much more serious. “This is very very different,” says Dave McCarthy, analyst at HSBC.
So far, the battles have largely been fought between the big four, which together control about three-quarters of the market.
But over the past five years, a new challenger has emerged. German discount supermarkets such as Aldi and Lidl have not only been expanding aggressively, but have been shedding their no-frills image. New products, such as lobster tails, and luxury Christmas puddings, have appealed to the squeezed middle classes.  Andrea Felsted, Senior Retail Correspondent – Read more…

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