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Tesco loses dispute with Asda over supermarket price war adverts

A Tesco attack on a cut-price promotion by its biggest competitor, Asda, has backfired amid evidence that a vicious high street price war is intensifying.

Historically, the big four Tesco, Asda, Sainsbury’s and Morrisons, have been involved in something of a phoney battle to be named the cheapest mainstream supermarket. However, evidence is now emerging that they are capping prices and running a host of genuine bargains in a bid to attract customers.

The battle comes against a background of research which shows cash-strapped families and others are actually putting less food in their trolleys than a year ago.

Tesco and Asda have been at each other’s throats in the last six months, while Sainsbury’s and Morrisons have also been dragged into the fray. The stores have launched a host of tit-for-tat price promotions and advertisements designed not only to talk up their own bargains, but also to undermine the claims of rivals.
Central to the price battle is the Asda ‘price guarantee’ where the store promises to undercut all its mainstream rivals by 10per cent on a basket of groceries.

Tesco chiefs have been infuriated by the deal and have retaliated with a price promise of their own to offer refunds worth double the difference if Asda is really shown to be cheaper on a basket of goods.

It has also run a series of powerful negative advertisements to undermine its rival. However, in a ruling published today(wed), the Advertising Standards Authority(ASA) has found Tesco guilty of misleading shoppers.

The ASA said: ‘A national press ad for Tesco showed a selection of fresh food products; their prices at Tesco and the prices of the same or equivalent products at Asda.’ The advertisement claimed the items were a total of £4.91 cheaper at Tesco.
And it then backed this up with the line: ‘One place you won’t find your fresh food for the weekend? In the Asda Price Guarantee.’

In fact, this was untrue because Asda was able to show that 13 of the 20 products shown in the ad were included in their price guarantee. Tesco has admitted it made a mistake, which it said had resulted from ‘an internal communication error’.

The supermarket apologised for the error and said action would be taken taken to ensure it did not happen again. The ASA said it welcomed the fact that Tesco has acknowledged the error. However, it said it was ‘concerned’ about the failure of Tesco’s checking system.

The watchdog said: ‘Because it was not the case that fresh products were not included in Asda’s price guarantee, and because Tesco had not supplied evidence to substantiate the claim that they were not, we concluded that the ad was misleading.’

This is the second recent blow to Tesco in its battle with Asda. It has been forced to cap the value of refunds under its price promise battle with Asda to £20 after it emerged some people were manipulating the system to claim more than £100 a time.

Source : Sean Poulter - Mail online

13 April 2011
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