Walmart-owned chain Asda has predicted another gloomy year for the Big Four supermarkets, and announced plans to spend a further £500 million on a price war with its rivals.
In a statement released over the weekend, CEO Andy Clarke confirmed that 2016 would be “another year of intense pressure” for supermarkets, and warned that “radical action”would be taken to compete with budget rivals Lidl and Aldi.
On top of the £1 billion investment into cutting prices that Asda announced in 2013, another £500 million will be put aside to increase competition in 2016. Britain’s Big Four supermarkets have had a difficult time of late, all losing out to independent stores and budget rivals. Clarke described the change as “a global phenomenon”, saying that “We saw the change coming and responded in 2013, but we didn’t move fast enough.”
The announcement comes just ahead of a big week for supermarkets, most of which will announce their post-Christmas trading updates later this week.