Consumer group Which? has welcomed Tesco PLC (LSE:TSCO)'s move to introduce cheaper own-brand range items in its convenience stores, but said more still needs to be done.
Sue Davies, head of food policy at Which?, said: “Despite well-advertised price cuts, Which?’s tracker shows that the cost of essentials like milk and butter is still very high and piling huge pressure on millions, which is why access to budget ranges is more important than ever to help people save money.”
Which? gave an example of Tesco’s own-brand penne pasta, which is 75p for 500g, though its budget version is 41p.
On Friday, Tesco said it would axe more than 50 branded items in its 2,000 Express convenience stores and replace them with own-brand versions.
Which? has been a consistent critic of the major grocers in recent months over foods prices, with research it carried out finding consumers felt they were getting a raw deal in convenience stores compared to mainstream shops.
Almost three-quarters said they found convenience store prices too expensive compared to larger outlets.
Tesco and the other established grocery majors are under pressure from discounters Aldi and Lidl, which have seen their market share surge as customers have sought cheaper options to buy food.
Last week, Aldi said it has expanded a round of price reductions, with around 7% on average cut from 30 additional household staples.
Apples, oranges and peaches are among the fruit prices being cut, while butter, personal hygiene ranges and pet food prices are also being reduced.
That makes 130 products that have seen reductions since Aldi started cutting prices two months ago.
In its announcement, Tesco said that on average the prices of the own label products being introduced were 40% cheaper than the branded goods they would replace.
Items being swapped for own-label alternatives include pasta and peanut butter while other branded items would be replaced by cheaper branded alternatives, it added.
Food price inflation is still running at 14.9% even though it eased in the four weeks to 9 July, according to retail industry data provider Kantar.