Ocado takes aim at supermarket giants ahead of price war

Ocado: taking on the big supermarkets in price challenge
Ocado: taking on the big supermarkets in price challenge

Ocado is set to launch a price war against Tesco and its other supermarket rivals to convince customers it is the cheaper option.

The online grocer’s chief executive Tim Steiner told The Sunday Telegraph that it will further roll out its "lower price promise" nationally in the next few months.

Steiner said: "The market will not reach tipping point until the online market is cheaper than the supermarkets. It is just not something that is going to go there overnight.

"Two weeks ago, we launched a pilot in Manchester called the 'lower price promise', where we are doing a basket match and we guarantee it will be cheaper.

Ocado will now roll out its lower price initiative nationally.

Ocado hopes to invest the money it saves from the efficiencies of being an online-only business into the price proposition during the next three years to make it cheaper than supermarkets with a physical presence.

The news of the price cuts comes after it emerged Ocado was speaking to advertising agencies for a one-off campaign as part of a growing investment in brand advertising.

It currently focuses adverting on inserts and outdoor activity to raise awareness of promotions and new product ranges.

Ocado's recent promotional marketing included a press campaign highlighting its price-match offer against Tesco on branded products, which used the strapline, "Ocado. Prices worth checking out".

Ocado claims that the majority of its customers come from Tesco and Sainsbury's, but the impending rollout of the "lower price promise" means Ocado will be able to effectively challenge Asda with a convincing alternative to the Asda's "price guarantee". 

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