Why Tesco's struggles are great news for shoppers

PA/AOL Money
Tesco slash prices
Tesco slash prices

Falling sales at Britain's biggest supermarket Tesco could mean good news for consumers as a price war has kicked off with rivals.

It followed Asda in announcing a raft of price cuts on some of its best-known products, giving hope to customers that there could be big savings across the board.

The news follows the price of oil falling to its lowest for five years, and Sainsbury's chief executive Mike Coupe said earlier this week that petrol could fall below the £1 a litre mark, chased down by supermarket competitors.

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Tesco announced its price cuts ahead of releasing disappointing Christmas sales figures, claiming the move meant average savings of 25% on 380 items including brands such as Hovis, Coca-Cola, Marmite and Tetley.

Chief customer officer Jill Easterbrook said: "We know that customers want to see changes in the way we serve them. One of the biggest things they've been saying is that they want prices which are simple, consistent and low.
"The changes we're making today are a first step in that direction, and we've focused on many of the favourite brands customers choose every day."

Asda this week cut the prices of 2,500 "essentials" such as fruit and vegetables, cereal, nappies, toilet rolls, milk, meat, eggs and fish.

Sainsbury's also announced further reductions as part of a £150 million price-cutting plan disclosed in November.

Britain's big four supermarkets are fighting desperately over the dwindling middle market which is being squeezed by high-end Waitrose sales and the huge popularity of budget operators Lidl and Aldi.

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