In the run-up to Christmas, the UK’s supermarket price war is heating up. Both Asda and Lidl have announced major price-cutting initiatives aimed at attracting budget-conscious shoppers during the festive season. This follows an announcement by Morrisons in September that it is cutting prices on around 650 products by an average of 18%, and by Aldi that it has invested £300 million in combatting food inflation for customers.
Lidl has committed a £250 million investment to reduce prices across more than 1,000 everyday items. Richard Bourns, chief commercial officer at Lidl GB, says the move is part of its mission to ensure “everyone should have access to healthy affordable food”. The discounter highlighted that its Lidl Plus loyalty scheme – which offers weekly coupons and rewards for regular shoppers – is the only such scheme available for budget supermarkets. The retailer has been named Grocer of the Year and Supermarket of the Year, reinforcing its reputation for value and quality.
Asda, meanwhile, has cut prices on 956 grocery items both in-store and online, with its Chief Customer Officer, Rachel Eyre, stating the move is designed to support families facing rising living costs. The supermarket has also reintroduced its Rollback scheme, slashing prices on thousands of products, and is pushing suppliers to help it become at least 5% cheaper than rivals. However, having already slashed prices earlier this year, it may face pushback from suppliers at its supplier conference, taking place today (7 October).
Tesco continues to grow
Despite these aggressive tactics, the UK’s largest supermarket chain Tesco continues to grow its market share, demonstrating resilience in a fiercely competitive environment. According to recent data, Tesco’s market share has climbed to 28.4%, up 0.8 percentage points year-on-year, while Asda’s has dipped below 12% for the first time in recorded history.
Tesco’s success is attributed to its price-matching strategies, investment in own-brand and premium ranges, and a strong digital transformation that includes growth in online sales and personalised engagement through its Clubcard platform. CEO Ken Murphy highlighted the company’s focus on “quality, convenience and affordability” as key drivers of its momentum.
Battle for customer loyalty
As the festive season approaches, the supermarket price war shows how the battle for consumer loyalty is intensifying. Lidl and Asda are banking on deep discounts to win over shoppers, while Tesco’s scale combined with its balanced approach – competitive pricing, brand strength, and digital innovation – appears to be paying off.
However, with food inflation forecast to peak at 5.7–6% in December, according to the Food & Drink Federation, retailers face a difficult balancing act. Meeting the needs of increasingly budget-conscious consumers while managing supplier pressures and protecting margins will make this one of the most challenging Christmas trading periods in recent memory.
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