Stores square up for cut-price fuel battle

Jul 23 2008 by Alistair Houghton, Liverpool Daily Post

SUPERMARKETS have launched a petrol price war with Britain’s biggest chains cutting the cost of unleaded and diesel by up to 5p a litre.

Asda announced it would cut the cost of unleaded and diesel by 3p a litre, and Morrisons swiftly followed suit by cutting the price of unleaded and diesel by 4p a litre.

Sainsbury’s said it was cutting petrol by 5p a litre from tomorrow for customers who spent £50 or more in stores. The promotion will run for two weeks.

Tesco said later it was cutting the price of unleaded and diesel by up to 4p per litre.

The retailer has a regional rather than a national pricing structure, so prices will vary slightly across the country, a spokeswoman said.

The supermarkets said they were responding to the recent drop in the price of oil. The price of a barrel of oil dropped from a peak of $147 to $130 in recent weeks.

AA president Edmund King said: “We have seen two drops in European wholesale fuel prices so far this summer, with the UK motorist seeing next to no benefit.

Since mid-July, the wholesale gasoline price has fallen 6% and the AA expects fuel suppliers to pass on, not pocket, the saving for the good of UK families, hauliers and the economy.

“We will watch price movements like a hawk, and should fuel suppliers and retailers appear to be dragging their feet we will seek to expose this.”

MEANWHILE, discount supermarkets have secured their best share of the UK grocery market yet as shoppers look to cut food bills, industry research showed yesterday. The discount sector now accounts for 5.9% of grocery spending, according to market research firm TNS Worldpanel, with the main players Aldi and Lidl achieving year-on-year growth of 19.5% and 14.3% respectively.

The till roll figures, covering the 12 weeks ending July 13, showed overall industry sales grew by more than 7% on a year earlier – fuelled by food price inflation of 5.8% in the three months to mid-June.

Amid growing pressure on household budgets, Aldi’s share of the grocery market stood at 2.9%, with Lidl at 2.4%.

Among the big four firms, Asda and Morrisons enjoyed 9% growth – ahead of the market – while Tesco was up 6.5% and Sainsbury’s 5.6% stronger.

Tesco is still the market heavyweight with a share of 31.3%, compared with 31.5% a year ago.

alistairhoughton