Morrisons launches “price crunch” in wake of VAT rise

Morrisons has launched its “biggest ever” price cut campaign in a bid to cancel out today’s (4 January) 2.5% rise in VAT.


Morrisons claims the “price crunch” has cut the cost of over 5,000 products, meaning a typical shop of the top 44 items in each category should now cost £56.73 in comparison to £96 before the promotion began.

The supermarket adds customers can “easily” save £10 a week in its stores by purchasing a basket of what it deems the 10 essential items: bread, milk, orange juice, teabags, sugar, bacon, whole chicken, sausages, baked beans and tomatoes.

Group commercial director Richard Hodgson says: “We understand that 2011 is set to be a tough year for consumers, so our Price Crunch helps cancel out the effect of the rise in VAT.

“These are not 1p price cuts – these are genuine savings on essential groceries that will cut the cost of the weekly shop significantly at a tough time for families.”

A study by the Centre for Retail Research and Kelkoo forecasts consumers will, on average, spend £324 less in 2011 due to the VAT increase, with total sales predicted to fall by £2.2bn in the first three months of the year.

Other retailers including Marks & Spencer and Tesco have also joined the price war today and pushed the VAT increase back on some products until after the January sales.


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