Posted online: May 7th, 2009

By Chris Ashmore
A supermarket price war has broken out in Letterkenny with prices crashing – and consumers pocketing the change.
This week Tesco announced a dramatic revamping of its operations at 11 stores in the Republic, including its Letterkenny outlet, which has resulted in prices falling by up to 25%.
The weakness of the pound against the Euro combined with the economic downturn has seen a stream of Irish shoppers head north.
But Tesco is fighting back, and so too are other multiples.
Dunnes Stores has already launched its sterling buster range or products while Aldi, Lidl and Centra have also embarked on price-cuts with noticeable special offers.
“This substantial investment will enable us to compete in the long term with prices north of the border and will remove the incentive or the need for consumers to travel, which has been bad for jobs, for local economies and the national economy,” Tesco Ireland chief executive Tony Keohane declared.
However, the supermarket price was has not met with universal approval. There is some concern that a number of Irish suppliers could lose out to British imports.
And the Irish Farmers’ Association has also expressed concern that the margins of farmers supplying supermarkets will be hit.