Tesco has implemented a series of price cuts on staple products in the UK while simultaneously lowering the cost of ordering groceries online.
The retailer is dropping the price of over 30 products including bacon, baked beans, broccoli, peppers, lettuce and bread.
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The company is also offering one-hour delivery slots for GBP1 (US$1.60) on groceries ordered over the Internet, while click-and-collect customers will be able to pick up their shopping free of charge.
It said the move was designed to bring “major savings” to its customers.
The group suggested Tesco.com customers could save GBP130 a year in delivery charges alone – while consumers signed up to its delivery saver subscription service could save GBP252 a year. Tesco has previously suggested that delivery costs represent the greatest barrier to growing online sales.
The price reductions come as competition on pricing heats up in the UK. Rivals Morrisons and Asda have both announced plans to cut prices in order to woo frugal consumers and fend off the threat presented by the growing market share of the discounters, Aldi and Lidl.
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By GlobalDataLast week, Tesco booked a near 7% drop in underlying pre-tax profits in fiscal 2013/14.
The company saw a 34 basis point drop in its trading profit margin as it invested in cutting prices and improving its proposition.
However, despite these investments, the group’s total full-year sales fell 0.2%, including currency exchange, to GBP70.89bn. In the group’s closely watched UK business, like-for-like sales fell 1.3%.
