Sainsbury’s takes on Aldi in price war: Cost of everyday items slashed

The supermarket price war has erupted again as Sainsbury’s slashed the cost of hundreds of items to take on Aldi.

Britain’s second largest grocer will cut the cost of 250 popular goods to match the German discounter.

Bosses hailed its ‘boldest ever value campaign’, adding that it represented a ‘significant investment’.

Price war: Sainsbury’s is to cut the cost of 250 popular goods to match German discounter Aldi

Sainsbury’s, which has 600 supermarkets and 800 convenience stores, will focus cuts on its most popular items, including meat, fruit and vegetables.

Prices will be slashed on 700g of meatballs, down from £3.80 to £3.08, a packet of two haddock fish cakes, reduced from £1.20 to £1.15, and 70g of chorizo slices, down from 90p to 46p.

It is the first part of the plan outlined by chief executive Simon Roberts in November to put food back ‘at the heart of the business’.

Roberts, who succeeded Mike Coupe in June, said: ‘Our new commitment to match Aldi prices on hundreds of our most popular products will mean our customers can be confident that they are getting the quality they expect from Sainsbury’s at great prices.’

The move will squeeze margins as the big grocers battle higher costs from delivering food and keeping staff and customers safe.

The price war is  the first part of the plan outlined by chief executive Simon Roberts (pictured) in November to put food back ‘at the heart of the business’

Supermarket profits have not soared despite demand rising sharply as they take sales from pubs, bars and restaurants.

Sainsbury’s has also paid back £440million of business rates relief, following the lead of Tesco, which paid back £585million.

The decision to slash prices is the latest attempt to thwart the rapid growth of German discounters Aldi and Lidl.

Experts believe consumers, many of whom face job losses and financial uncertainty, will look to save money on food. 

Supermarkets are keen to stop the discounters further improving their position and repeating their success after the last recession.

Last year Tesco, which leads the market with 27 per cent share, launched its own Aldi price match scheme. 

It also launched its Clubcard Plus which offers discounts for members who pay a monthly £7.99 subscription. 

Asda and Morrisons responded by slashing prices on hundreds of products.

But Aldi claims it is at least 24 per cent cheaper than its rivals. A spokesman said: ‘Shoppers know that the only place you can get Aldi prices is at Aldi.’ 

Its sales growth has fallen behind during the pandemic, as its smaller online business has not been able to take advantage of the booming demand for home deliveries.

Figures from analysts Kantar showed that Aldi sales grew 5.7 per cent in the 12 weeks to January 24, compared with 12.2 per cent growth across the UK grocery market. 

Aldi says in-store shoppers are still switching to it, and rivals are making a loss on online delivery.

Sainsbury’s sales were 12 per cent up for the period after expanding its online delivery capacity from 370,000 weekly slots to 830,000.