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LONDON (Alliance News) - Wm Morrison Supermarkets PLC Thursday became the first of the UK's four big supermarkets to start matching prices with upcoming German discount grocers Aldi and Lidl, deepening a price war that is engulfing the sector.
Morrisons, the UK's fourth largest supermarket chain, said the new price match and points card, called 'Match & More', will provide a price-match guarantee against its bigger rivals Tesco PLC, J Sainsbury PLC, Wal-Mart-owned Asda, as well as the German discounters, which have been scooping up sales and market share from the UK's big four.
"If a comparable grocery shop is cheaper at any of these supermarkets, 'Match & More' users will automatically get the difference back in points on their card. Shoppers also will be able to collect extra points on hundreds of featured products and fuel," Morrisons said in a statement Thursday.
Morrison said it will launch the card across the UK on Friday and will be in stores in time for Christmas.
It said shoppers will receive 10 points on their cards for every penny difference in price. "For example, if Lidl is the cheapest and is 60 pence cheaper than Morrisons then 600 points are added to your Match & More account," Morrisons said.
Last month, Chief Executive Dalton Philips told journalists he was confident the grocer had "something really special" coming, which he said would "back up its value credentials".
"The fact that people are spending so much money in our stores, and we don't know who they are is not viable," Philips said last month ahead of the loyalty card launch.
The decision to start offering a customer loyalty card marks a big turnaround for a company that for years had said it doubted the benefits of such a scheme.
The UK grocery sector has been dominated by four big players in recent decades. However, since the financial crisis, shopper habits have been changing and those players - Tesco, Sainsbury's, Asda and Morrisons - have been losing market share to the likes of Aldi and Lidl at the bottom end of the market, and Waitrose and Marks & Spencer Group PLC at the premium end. Profit and sales have been falling at the three listed grocers: Tesco, Sainsbury's and Morrisons.
Morrisons has been slow in keeping up with its competitors. Its profit last year and in the first-half of this year was hit by its decision to invest heavily in deep price cuts, made in an attempt to counteract some of the pressure.
This year alone, Morrisons has also spent hundreds of millions of pounds in lowering its prices, with its latest round of price cuts were in June, when it cut prices on another 135 branded and own-branded "everyday products,", having already cut the cost of 1,200 products across its stores, by an average of 17% in May. Morrison pledged earlier this year to invest around GBP300 million in price cuts this year.
"If you're not offering them [consumers] the best value, they will just go elsewhere. If they get better value, they will be coming to us more often," Philips told BBC News Thursday.
Morrisons said it will use insight gained from the card to tailor offers to its customers. It said customers can rack up points on the new card by shopping in store or by buying petrol from its petrol stations.
"When 5,000 Match & More points are accumulated, the customer receives a GBP5 voucher at the till," it said.
Morrisons said it also plans to enable customers to turn their points into vouchers for leisure activities, travel and dining out, similar to what its rivals Sainsbury's does with its nectar card and Tesco does with its clubcard.
Last week, Sainsbury's pledged lower prices on its branded products, and said its brand match coupons will now only compare its prices and deals on brands with Asda, and no longer Tesco. Since launching the brand match scheme three years ago, the grocer had been comparing prices with both Asda and Tesco.
Just days later it also announced it will slash the cost of diesel and petrol by up to 5 pence a litre. Sainsbury's lower prices kick in from Thursday.
Morrisons shares were trading 0.2% higher Thursday afternoon at 160.20 pence.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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