Credit: Paul Gillett/Geograph

Tesco has upped the ante in the supermarket price war

The grocer is offering to 'immediately' match its competitors' prices at the checkout.

by Jack Torrance
Last Updated: 20 Oct 2015

If there’s one winner of the turmoil that has been engulfing supermarkets for the last year or two, it’s the consumer. Eager to hoover up every last penny of spending, grocers have been slashing prices to the bone.

Today Tesco announced its latest scheme for getting customers through the door. Its Price Promise scheme used to offer shoppers vouchers to make up the difference if any of the products in their basket were more expensive than they would have been at Asda, Morrisons or Sainsbury’s. But now with 'Tesco Brand Guarantee', those discounts will be applied ‘immediately’ (in the case of branded products at least) at the till.

That might sound like a small change but it could make a substantial impact on its customers. More than one third of shoppers have never used a price match scheme, and little wonder when remembering to hang on to vouchers or to use a loyalty card like Morrisons Match & More (which was amusingly taken to pieces by Lidl) is such a faff.

‘Shoppers tell us price matching vouchers are a pain and don’t really help them,’ said Tesco’s UK boss Matt Davies. ‘We all know it can be stressful and awkward when you have to rummage through your wallet to find a price match voucher.’

Then again, when Tesco is only matching the prices of its big rivals and not those of discounters like Aldi and Lidl, the impact of the new scheme might be pretty limited.

If consumers are the winners in a price war then it follows that suppliers are the losers. Though Tesco claims to have ‘reset’ its previously controversial supplier relationships, offering small suppliers a standard 14-day payment period, it seems not everybody has been so quick to improve things.

The Times revealed today that the Groceries Code Adjudicator, the government body responsible for making sure supermarkets treat suppliers fairly, has been breaking its own supplier relations rules. The GCA aims to pay its suppliers within five days, but on 24 occasions in the last financial year suppliers didn't receive payment within 30 days.

That's largely becasue the GCA’s invoices are actually settled by its parent, the Competition and Markets Authority, but the news is nonetheless embarrassing for the body, which launched an investigation into Tesco’s treatment of suppliers in February. Amusing as the GCA’s predicament is, it doesn’t exactly exonerate the supermarkets, which have for so long squeezed their suppliers for all they're worth.

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