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Grocers take on Asda in price war

posted 10 Nov 2008, 04:47 by myEdinburgh Admin   [ updated 10 Nov 2008, 04:50 ]
A GROUP of independent grocers have launched a price war against a new Asda supermarket set to open in the Capital today.
The six retailers, within close distance of the new giant Asda at Newhaven, have slashed the cost of 12 basic items in a bid to keep local trade.

Window posters and in-store displays will be used by the stores to promote the message "save £8.41 on this basket versus Asda".

Among the promotions are bottles of wine for £2.49 cheaper than the Walmart-owned chain, toilet roll for 36p less, tea for more than £2 less and beer for more than £1.50 less. And the price war has won support from an unlikely source – Asda itself.

The campaign has been spearheaded by cash-and-carry company Bellevue, which is offering discounts to its retail customers in close proximity to the new store.

Colin Smith, head of sales and marketing at Bellevue, said: "We have made a concerted effort to help those on the doorstep of this new store. The worry is that people on the doorstep of Asda will start using it as their everyday store. That would be damaging for these independent retailers. There is an impression that Asda will be cheaper but we want to show how the independent retailer is competitive.

The cheaper prices have been secured by Bellevue through negotiations with the big brands as a wholesaler, and the independent retailer still maintains the same profit margin on the products as they would if they were full-price.

Mr Smith said that on some of the product lines Bellevue will not make any profit.

He added: "We believe that it is our responsibility to support the independent sector in the area and hope that this approach will give the local stores a higher profile at a time when Asda is heavily advertising the opening of its new store to the local community."

Mohammad Munir, owner of AR Supermarket on Newhaven Road, which is taking part in the promotion, said: "I am trying to keep customers coming in and I hope the discounts will help."

Nigel Duncan, vice-chairman of the Federation of Small Businesses in Edinburgh, said: "The FSB is very much in support of keeping trade local.

It is difficult enough with the credit crunch, never mind having a major supermarket landing on your doorstep."

But Asda welcomed the competition from the local shops.

A spokeswoman for the company said:

"Voted cheapest supermarket for 11 years in a row, customers can be reassured that Asda is the place to go for your weekly shop."

Shops taking part:

AR Supermarket, 218 Newhaven Road

• Lifestyle Express, 18 Portland Place

• Wee Grocer, 7 Anchorfield

• AA Newsagents, 41 South Trinity Road

• Crolla's Grocers, 8 Newhaven Main Street

• Ali's Store, 39/41 North Junction Street

The offers:

• Miller 500ml, 6 for £4.49 (Asda 440ml, 6 for £5.11)

• Fairy 500ml 89p (Asda 95p)

• Carling 8 pack £5.50 (Asda 10 for £7)

• Sunblest 800g 75p (Asda own label 800g 72p)

• Russian Standard Vodka 70cl £9.99 (Asda £12.48)

• Asda prices as advertised on Oct 29