Ocado kicks off price war with Tesco in bid to lure back shoppers after the online supermarket owner’s losses grew to over half a billion pounds
- Ocado said it will match the prices of over 10,000 products from March 1
- These will include Ocado’s Own Range essentials as well as branded goods
Ocado has kicked off a price war with Tesco in a bid to lure back shoppers after its losses grew to over half a billion pounds – and as grocery bills rise at their fastest rate on record.
The upmarket online supermarket said from March 1 it will match prices against over 10,000 products listed on Tesco’s website as its profits come under pressure amid the cost of living squeeze.
Price-matched items will include Ocado’s Own Range essentials, which include items such as milk, eggs and pasta, as well as some branded goods.
Four pints of semi-skimmed milk in the value range will cost £1.65, while carrots will cost 45p and buyers can get six medium free-range eggs for £1.30.
A standard 500g bag of fusilli pasta will cost 95p at both retailers – however this cost around 50p two years ago.
Ocado has kicked off a price war with Tesco in a bid to lure back shoppers (file pictures)
The price promise will also compare against Tesco promotions, including Clubcard deals and is marked with a red £ sign on Ocado’s website.
It will also offer customers money off their next shop if their shopping would have come to a cheaper total at Tesco.
The price war came after Ocado’s losses grew to over half a billion pounds last year as the online supermarket struggled to attract customers.
It marked a sharp decline since the pandemic, when the company cashed in on a demand boom as people opted for grocery deliveries during lockdowns.
Like other firms, Ocado has hiked prices to offset the effects of surging inflation and rising fuel costs, with the company’s average selling price increasing by 4.5 per cent last year to £2.55 per item.
Customers have also been spending less on orders as the cost of living squeeze began to bite, with the average shopping basket size dropping to 46 items from 52 in 2021, pushing the value down to £118 from £129.
Price-matched items will include Ocado’s Own Range essentials, which include items such as milk, eggs and pasta, as well as some branded goods
But Ocado boss Tim Steiner said his firm was not experiencing the shortages of fruit and vegetables such as tomatoes which have left its competitors’ shelves bare in recent weeks.
It came as grocery price inflation hit record levels, with British households to be hit by an extra £811 on their yearly shopping bill.
The pace of increases across supermarkets hit 17.1 per cent in the four weeks to February 19, data from market research firm Kantar revealed.
Large rises in the cost of household essentials, such as pasta, cooking oil and cheese, have had ‘a big impact on people’s lives’, said Fraser McKevitt, head of retail and consumer insight at Kantar.
Shoppers have switched to own-label products after being forced to tighten their purse strings, with sales up 13.2 per cent this month, well ahead of the 4.6 per cent increase in branded goods.
MailOnline has reached out to both Ocado and Tesco for comment.
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