LONDON (Reuters) – Asda will next month abandon a scheme which refunds shoppers the difference if the goods they purchase are more expensive than in rival supermarkets, following other chains that have scrapped similar programmes.
Asda, the British supermarket arm of Walmart <WMT.N> that has agreed to a takeover by bigger rival Sainsbury’s <SBRY.L>, said the scheme was no longer relevant and it would instead invest directly in lowering prices.
Its move follows market leader Tesco’s <TSCO.L> decision in June to scrap its “Brand Guarantee” scheme. Sainsbury’s abandoned its “Brand Match” scheme in 2016.
The “Asda Price Guarantee” (APG) was launched in 2010, promising customers that their basket of shopping at the supermarket would be 10 percent cheaper than at Britain’s other big grocers. If not, Asda would refund them the difference plus 10 percent in a voucher to be used in stores.
“Today, the APG, whilst still the iron clad promise it always was, has become less and less relevant to customers with less than 1 percent of customers using it,” said chief customer officer Andy Murray.
“(Customers) have more price information at their fingertips than ever and they vote with their feet if they feel a retailer is off the mark on price,” he said.
All of Britain’s big four supermarket groups, including fourth-ranked Morrisons <MRW.L>, have been trying to narrow the price gap with German discounters Aldi and Lidl but are still losing market share to them.
Asda said it has invested over 100 million pounds in price cuts over the last year and plans another round of reductions in October.
Sainsbury’s agreed a 7.3 billion pounds takeover of Asda in April. The two firms have said combining will enable prices to be lowered by about 10 percent “on many of the products customers buy regularly”.
Last month Asda reported a fifth straight quarter of underlying sales growth.
(Reporting by James Davey; Editing by Keith Weir)