Ocado slashes prices of over 100 ‘everyday essentials’ including branded, own-label and M&S items
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Ocado has slashed the prices of more than 100 “everyday essentials” across a range of branded, own-label and Marks & Spencer items.
The online retailer is dropping the prices on the likes of milk, better, cheese and bread as grocers come under increasing pressure to pass on reduced wholesale costs to shoppers.
Ocado’s four pints of own-brand milk will drop by 10p to £1.45, while two pints will reduce by 5p to £1.20. Cuts will also be applied to Lurpak garlic butter, down 25%, 100g of Ocado grated parmesan, down 16%, and own-brand seeded rolls, down 17%.
More than 60 reductions reflect recent M&S price cuts and include products such as Greek-style yoghurt, salmon fillets, avocados, ciabatta rolls and tortilla wraps. The move follows Ocado’s Price Promise launched earlier this year, which compares prices against more than 10,000 like-for-like products on Tesco.com.
Ocado Retail chief executive Hannah Gibson said: “Together with the Ocado Price Promise, cutting the prices of these 100 essentials means we’re even better value, alongside the service, range and quality which our customers love.”
It comes after M&S last week cut the price of 70 staple products by between 3% and 25%, such as beef mince and chickpeas, while also locking in previously made reductions on 150 goods until the autumn, including pork sausages, cheddar cheese and coleslaw.
Meanwhile, Morrisons also announced last week that it was cutting the prices of 47 products by an average of more than 25%, with the lower prices to remain in place for eight weeks. The price cuts affect products including squash, cereal and pitta bread.
Rival supermarket Asda previously froze the prices of more than 500 products until the end of August, while Sainsbury’s said it would cut the price of toilet paper by as much as 11% following other recent price reductions.
Waitrose has also reduced the price of more than 200 staple food products by at least 10% as part of a £100 million investment plan to lower customer bills.
Ocado’s move comes a day after supermarket senior executives from Tesco, Sainsbury’s, Asda and Morrisons were quizzed by MPs on food price inflation and why prices are still rising when commodity and wholesale costs are dropping.
Supermarkets are facing increasing pressure to pass on savings they are seeing on wholesale items to shoppers, who have faced punishing food price inflation in recent months.
Data from the BRC-NielsenIQ Shop Price Index this week suggested retailers are now beginning to pass on lower wholesale costs, with food inflation easing for a second month running as supermarkets cut the price of household staples.
Food inflation decelerated to 14.6% in June, a relatively significant drop from May’s 15.4% and below the three-month average of 15.2%. Fresh food inflation saw a significant slowing from May’s 17.2% to 15.7% as retailers dropped the prices of staples including milk, cheese and eggs, but it still needs to fall substantially further to help rein in higher-than-expected overall UK inflation, which is still running at 8.7%.
The Bank of England last week lifted interest rates to 5%, with a bigger-than-expected 50 basis point hike to try to tame rising prices. The Bank suggested some retailers were hiking prices or failing to pass on lower costs to consumers as a way of increasing their profit margins at a time of stubborn inflation.