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Friday, February 5, 1999 Published at 12:53 GMT

Business: Your Money

Supermarket bread war escalates

A cut in the price of a loaf means more dough for customers

A bread war has broken out in Britain's supermarkets as leading retailers jostle to offer the cheapest white loaf in the country.

Shoppers can now snap up their white sliced for as little as 7p after an intense round of price-cutting by the major chains.

Union leaders claim it will result in less choice for consumers as competition is driven from the market.

Lucy Atherton: bread prices crumbling
Joe Marino, general secretary of the Bakers, Food and Allied Workers Union, which represents 30,000 members, said: "This whole price war fiasco is obscene.

"The problem is that it will all be reflected in hundreds and even thousands of job losses.

[ image: Shoppers are toasting the cuts]
Shoppers are toasting the cuts
"There is no way that a loaf of bread can be produced for 7p. It's just ludicrous. Small businesses will just be dead in the water."

But industry expert Jack Winkler of Food and Health Research said the cost-cutting was just another publicity gimmick designed to lure more shoppers into the aisles.

He said: "It is a publicity stunt by the big majors who are facing pretty stiff competition from big discounters like Aldi and Netto.

"The small producers will survive, because the price war won't last more than a few weeks.

"In the long term there will be a gradual narrowing of prices between the majors and the discounters and that will be the real good news, not the one-off promotion of specials like this."

Jack Winkler: It is a publicity stunt
Tesco and Asda fired the opening shots in the race to butter up customers by slicing the price of an own-brand loaf to 9p.

That brought a rapid response from rival Kwik Save which reduced its No Frills white loaf from 17p to 7p.

A Kwik Save spokesman said: "We are staying true to our `We're cheap, so you're cheerful' promise.

"The company has responded to the current prices at other UK supermarkets and is determined to stay ahead of the competition whilst helping customers save their dough."

The northern-based Morrison's chain, which has 95 stores, cut the price of both brown and white loafs from its Better Buy range to 8p.

But it was the Kwik Save price which was preying on Asda and Tesco managers' minds and last night they hit back by matching the 7p loaf.

Slicing profits

An Asda spokesman said: "We remain committed to offering the lowest prices nationally and will look closely at any developments by our competitors."

A Tesco spokesman added: "We will not be beaten on price for essentials such as bread."

Last night Safeway became the latest chain to enter the fray, cutting the price of its own-brand white sliced loaf to 8p.

Their decision could encourage Sainsbury's to join in. So far the price of their economy loaf has remained at 17p - more than double the price in rival stores.

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