Morrisons cuts prices to win back deflecting customers

Raising the prospect of an aggressive supermarket price war, British supermarket chain Morrisons has slashed the prices of more than one thousand of its products.

The fourth largest supermarket chain of Britain announced on Wednesday that it was bringing down prices of 1,200 items, including branded products like Jammie Dodgers and Morrisons produce like sausages and bacon, by an average of 17 per cent.

The price cuts are part of the company's £1 billion programme that aims at winning back customers by narrowing the price gap with cheaper rivals.

Morrisons CEO Dalton Philips said the company was really serious about making its products cheaper and that it was not a temporary skirmish.

Announcing the price cuts, he said, "I know this will be easy to characterise as a price war, or a fight-back against the discounters. But this is not a temporary skirmish or a response to just one channel. It is about firmly re-establishing our credentials."

Morrisons, which has long been suffering a notable decline in sales, also claimed that a number of investors had shown strong understanding and support for its policies.

The move shows that Morrisons is simply trying to play catch up with cheaper rivals. For instance, Morrisons has cut the price of a pack of Huggies Pure by 60 per cent to £1. But Asda and Tesco are already offering the same product for £1.