The supermarket chain Asda has slashed the price of its eggs, as leading UK retailers embark on a New Year price war to win market share back from the discounters.
Newcomers like Aldi and Lidl have been enjoying huge growth in Britain, taking chunks out of the market of the big four supermarkets – Tesco, Sainsbury’s, Asda and Morrison’s. The German retailers have been attracting consumers with their low cost offerings but the UK retailers are hoping to win back their old customers by cutting their own prices. The latest example of this price war is Asda selling half a dozen free range eggs for as little as 79 pence.
The 79 pence offering from Asda is for six mixed weight free range eggs, but the supermarket’s price-cutting appears to extend across its egg range. Six large Asda free range eggs are being sold for 99 pence – down from £1.65; six very large free range eggs are now priced at £1.09 – down from £1.80; and six medium free range eggs are being sold for 89 pence – down from £1.25.
Free range egg producers may be concerned that such discounting could eventually impact on producer prices, although the Ranger understands that, at the moment, Asda is not looking to recover the discount from its suppliers. However, heavy discounting may increase demand for free range eggs still further in what has been a very tight market. Egg traders had difficulty obtaining free range eggs towards the end of 2014 and any increase in demand may exert more upward pressure on producer prices.
Many in the egg industry said that discounting was at least partially responsible for strong free range egg demand in 2014. Although Asda is also cutting the price of cage eggs – down to 55 pence for six from 89 pence – the reduced price of free range eggs may encourage even more people to opt for higher welfare.
