Morrisons has announced significant price cuts on more than 1,000 products, raising the prospect of an all-out supermarket price war. The UK's fourth-largest supermarket chain, which has been struggling with falling sales, says prices on everyday essentials will now be 17% cheaper on average.
The move comes as all major UK supermarkets face pressure from discount retailers like Aldi and Lidl, as well as the growth of online shopping. Morrisons has been particularly affected, losing more customers to discounters than its rivals. In March, the company reported dire annual results and pledged £1 billion over three years to lower prices.
Morrisons CEO Dalton Philips emphasised the permanence of the cuts, stating, 'This is not a temporary skirmish or a response to just one channel. It is about firmly re-establishing our credentials as a value-led grocer.' The company claims it has never before launched price cuts on such a large and permanent scale.
The discounts cover 1,200 products, including 35-40% key branded goods. However, on some items, Morrisons is merely matching competitors' prices. For instance, Huggies Pure baby wipes are reduced to £1, a price already offered by Asda and Tesco. The real battleground is on own-brand items like bread, milk, and fresh produce, where Tesco is investing £200 million in price cuts.
Philips likened the grocery market shift to the airline industry's disruption by budget carriers, warning that 'the clock is not going to be turned back.' Morrisons is also simplifying shopping by reducing promotions and unnecessary pack sizes. The company is so committed to the strategy that no shelf price can be raised without CEO or group trading director approval.
The bold move will halve this year's profits compared to City expectations. Success depends on whether the cuts translate into a much-needed sales rise, but the turnaround is expected to be neither easy nor quick.
