Morrisons has become the first of the top grocers to launch a price-focused ad in 2017, a much anticipated move despite the rhetoric around talking up its brand values.
The retailer will make an average price cut of 19% across 800 items, specifically on healthy foods which tend to experience a January surge. Elsewhere, it has simplified the price of over 5,000 items so that they are priced in round pounds to make it easier for customers to calculate what is in their basket.
“Many customers are feeling the pinch after Christmas so we are cutting prices, particularly on fresh food and everyday essentials,” said Andy Atkinson, Morrisons marketing and customer director.
“These price cuts will help families who are on a tighter budget and will continue to make Morrisons more competitive.”
Supporting this investment into price will be a backed by a marketing campaign spanning TV, press, digital, in-store and direct mail.
It’s a telling sign of things to come in the grocery sector in which the Big Four – Tesco, Asda, Morrisons and Sainsbury’s – have been working hard over the past year to stop talking about price and instead differentiate from the discounters by better articulating their brand values.
In Morrisons’ most recent above-the-line work, it pushed the moments that it can make special – a strategy that continued through to its Christmas campaign.
But, as The Drum analysed last year, between Brexit, the falling value of the pound and stagnant wages people more than ever are seeking out value.
Rival Tesco could be next to abandon its promise to refrain from using price-comparison tactics in ATL work.
While it has benefited from talking up the qualities that make it unique, chief executive Dave Lewis recently admitted to The Drum that a rethink might be in order.
"Since I've been here we've not advertised price directly at all, especially in above-the-line. Interestingly, the perception of our value has improved considerably over that time. Direct redemption and communicating that in-store is a much better way of communicating price. But we'll see if the dynamic changes as we go forward in relation to inflation," he said.
"The market may change considerably in the next six months and we'll have to revisit it if that's the case."
Morrisons will be keen to show that it’s reducing prices in some areas in a bid to counteract the hikes it has been forced to make elsewhere. ‘Marmitegate’ as it was dubbed, shone a light on the battle between supermarkets and food makers as the latter try to pass the rising cost of manufacturing goods fuelled by Brexit on to the former.
Tesco rejected a 10% price hike Unilever proposed on its major brands, like Marmite, while Morrisons caved and agreed to a 12% increase.