Tesco's plans to drive down the price of cucumbers and carrots in the first phase of its £200m price-reduction strategy have received a mixed reaction in the industry.
The UK's largest supermarket announced last month that it will drop the price of a cucumber from 65p to 49p and carrots from £1 to 80p per kilogram as part of a move away from "confusing" promotions to consistent low prices on key items.
Cucumber Growers Association technical officer Derek Hargreaves said he welcomed the supermarket's assurances given at last month's NFU conference that growers will still be paid the same for produce, adding that as a result: "They are clearly not making any money from cucumbers."
Growers "are not unhappy" about consequences for short-term demand, he said, but: "It values a cucumber at 50p, which is not fantastic. Asda already charges that. How long before Sainsbury's does too? If that's what supermarkets feel they have to sell them at, it devalues them in the eyes of consumers, and they won't be able to charge more in the future. All production prices are going up and what growers get now isn't enough."
But British Carrot Growers Association chairman Rodger Hobson was more sanguine, saying: "Traditionally if things are on promotion for a while that encourages sales, and it wouldn't be bad to push sales at the moment."
Morrisons - Lost market share to win back
Morrisons has indicated that it will also head down the price-cut route following a disappointing two per cent fall in turnover for the year to the start of February.
Chief executive officer Dalton Philips said the supermarket has lost market share to discount retailers. "Price is not the only determinant of store choice, but it is the most important factor. It is essential that we are close to the market leader," he added.
Morrisons already charges 50p for a whole cucumber and 69p for a 1kg bag of carrots.