Following the announcement that Tesco is lowering prices of everyday products to win back shoppers, this Insight looks into the recent pricing activity in the Own Label Milk category.
Following hot on the heels of price reductions in carrots, tomatoes, onions, peppers and cucumbers, this week’s focus on Milk has raised the prospect of a supermarket ‘price war’, leading to fear in the wider dairy farming industry that major buyers could apply pressure.
The following graph shows an average shelf price for a selection of Own Label Milk products. These products have seen a significant drop in price in Tesco today (4 March 2014), to match the average price of Own Label Milk at Asda (£1.14). Sainsbury’s and Morrisons continue to sit at a higher price point, at £1.55 and £1.63 respectively.
Taking a closer look at the popular variant, Own Label Fresh Semi Skimmed Milk 4 Pints, in January 2014, this screenshot from Brand View shows that Asda is the only retailer with the lower price point of £1.00, with the other retailers priced at £1.39.
Tesco and Morrisons ran Multibuy promotions during the six months leading up to 25 February 2014 when the promotion ends in Tesco.
Looking at the same product today (4 March 2014), we can see that Tesco has matched its base price to Asda’s at £1.00. Morrisons and Sainsbury’s continue to sit higher at £1.39.
Selecting Own Label 4 Pint SKUs across Tesco and Asda using Brand View’s Strategic Pricing Ladder report, we can see that although a number of products have been matched to Asda’s £1.00 mark, there are still two Organic SKUs which are not included in this pricing activity. Both are 7.6 per cent more expensive in Tesco than in Asda.