Tesco triggers Christmas price war

Supermarket giant Tesco has started a Christmas price war after announcing it would cut prices by up to 50% on 1,000 items.

Now other supermarkets and High Street shops are set to follow as Tesco also confirmed it would implement the VAT cut three days early on a range of goods.

The chain said it would pass the VAT reduction announced by Chancellor Alistair Darling on to all applicable non-food products, including electrical goods, home entertainment and clothing, from Friday.

The temporary 2.5% cut in VAT from 17.5% to 15% comes into effect officially on Monday.

Asda, Sainbury's and Morrisons are expected to follow Tesco's lead in the next few days, and House of Fraser has already announced price cuts of up to 40% in a two-day blow out.

Tesco commercial director Richard Brasher said: "We know that many families will start their Christmas shopping this weekend as pay packets arrive and we don't want customers to miss out on the cut in VAT which comes in on Monday."

But a spokesman for DSG international plc, owner of Currys, PC World and Dixons.co.uk, said they had passed the cut on in full at midnight on Monday, the day of the Pre-Budget Report.

He said: "We felt it was right thing to do, even though it was complicated.

"We also felt that we if did not do it then customers would stay away and we need to help customers, not make it more difficult."


Original article here