Asda’s bold new boss may have spooked rivals, but shoppers will come out on top, writes Susannah Streeter in today’s Notebook

Asda sparks UK trolley war

While trade wars risk denting global growth, rivalries closer to home are disrupting the supermarket sector. Trolley wars are threatening to break out, after Asda’s new chair Allan Leighton boasted that he had a war chest to spend on turning around the struggling grocer.

Amid expectations that fresh rounds of cost cutting will be unleashed, it sent a shiver through the share prices of rivals Tesco, Marks and Spencer and Sainsbury’s. Just over £4.1bn was wiped off the value of the listed grocers in just two days of trading, highlighting that shareholders are expecting a period of intense competition, which is likely to hit profits, especially as it coincides with upcoming payroll cost increases.

However, it’s still going to be a struggle for Asda to compete on price alone, given the loyal customer followings of its rivals. For shoppers though, it’ll be welcome relief. They had been bracing for further rises to be passed on by the grocers later this year due to their higher tax burdens, so a price war may lighten the load for struggling families, particularly those lower income households, where the weekly shop makes up a significantly greater proportion of their incomes.

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