Asda warned against irrational price war

Bosses from retailer Sainsbury’s have suggested that starting a price war would be not be a logical step forwards for rival retailer Asda.

In a call with research company Bernstein, highlighted in British Baker sister title The Grocer, Sainsbury’s chief executive Mike Coupe and and chief financial officer John Rogers said Asda would be better off focusing on its operational shortcomings.

Despite an announcement by Walmart International president and CEO David Cheesewright last month that Asda would focus on protecting shares, rather than profits, Coupe and Rogers aired doubts that Asda would go in hard on prices.

Rogers said: “It would be much more logical for Asda to only lower the prices of the products available in discounters, and recover investment on other lines.”

He added: “Over the last 10 or 20 years they’ve always had that unique proposition of being the lowest-priced in the market. It’s difficult to see Asda recovering that position.”

Last month, Bernstein forecast that Asda would tackle poor store standards and its own-brand range, rather than focus on price, to effect a turnaround.

In January 2015, Sainsbury’s topped the table in the sales price war between the big four UK retailers.

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