Food prices slashed by 30%

Families could see up to 30 per cent slashed off their food bills thanks to a price war started by the country’s biggest supermarket. Tesco last night announced it would be cutting the cost of 3,000 essential items, including milk, cheese, bread, pasta, fruit and vegetables, from Monday. Several non-food products will also be reduced. And other major supermarkets are expected to follow suit. The price cuts could halve the impact of inflation for some of ­Tesco’s least affluent customers, who spend a larger proportion of their income on groceries, the supermarket claimed. It will be welcome news for consumers who have seen the cost of food soar over the past year. Food inflation is 6.1 per cent, far higher than the 4.5 per cent official Consumer Prices Index figure. And other household costs, including energy bills and petrol prices, have also soared, while wages have not kept pace. The British Retail Consortium welcomed the price cuts.Spokesman Richard Dodd said: “At a time when household budgets are under such pressure this is really good news for consumers. Other supermarkets will now all be watching closely.” Tesco chief executive Richard Brasher said the £500million Big Price Drop campaign was the biggest in his 25 years in the retail industry. Most of the reductions will be on Tesco own brand products. The number of promotions and multi-buy offers will be cut. And the store is dropping its double Clubcard points scheme at the end of October. Mr Brasher said he was confident the cuts would not affect profit margins as the investment for the campaign would come from money saved through efficiency measures as well as the scrapping of double points. He shrugged off claims that the price cuts would only be temporary. “My intention is to reduce prices and keep them in place,” he said. Tesco’s rivals reacted angrily last night to the news. Asda has already launched a scheme where it guarantees to be 10 per cent cheaper than its rivals, while Ocado and Waitrose have matched their prices with Tesco’s. Sainsbury’s is also trialling a price-matching scheme in Northern Ireland. A Sainsbury’s spokeswoman said: “This is classic smoke and mirrors from Tesco, giving with one hand and taking with the other.“Removing double Clubcard points will save Tesco £350million. “It is no surprise to us that Sainsbury’s price match policy, together with a stronger own brand offer, has forced Tesco to take this kind of action.” A spokeswoman for Asda, the UK’s second biggest supermarket, said: “No amount of spin can change the fact that our price guarantee ended price wars. Others can huff and puff as much as they like. Shoppers want savings not spin.”