Tesco Fires Opening Salvo at Sainsbury’s in Christmas Toy Battle

  • U.K. retailer will match or beat Argos chain on about 200 toys
  • Robotic chimps, Lego sets now 5 pounds cheaper at Tesco
Photographer: Brendon Throne/Getty Images

Tesco Plc has pledged to match or beat toy prices at J Sainsbury Plc’s Argos stores in a bid to steal a march on its U.K. rival as the Christmas shopping season begins.

Britain’s biggest supermarket said Thursday it would meet or undercut what Argos charges on about 200 toys, as part of a wider price-matching initiative against the catalog retailer on more than 8,000 products. On its shelves, Tesco is displaying its prices side by side with those of Argos, Britain’s largest toy seller, which was acquired by Sainsbury last month and offers everything from computers to garden furniture.

“Tesco have fired a broadside as the start of the Christmas trading period,” Bryan Roberts, an analyst at TCC Global, said by phone. “There’s usually a bit of a set-to between retailers on toys but what makes this more piquant is that Sainsbury’s now owns the country’s leading toy seller.”

Tesco’s move echoes its guarantee to instantly refund customers on branded groceries and could herald a similar battle in general merchandise. Sainsbury bought Argos’ parent company for 1.4 billion pounds ($1.72 billion) to diversify the company amid a brutal food price war that’s eroded profits across the U.K. grocery industry. Sainsbury said last week that it would open Argos branches or collection points inside almost all of its stores.

Among the toys Tesco has cut prices on is the Zoomer chimp -- a robotic primate that responds to voice commands -- which it sells for 94.99 pounds ($116), five pounds cheaper than at Argos. A Lego volcanic exploration base has also been trimmed to 49.49 pounds, about five pounds cheaper than its rival.

Tesco’s price cuts come amid Sainsbury’s week-long sale on toys, featuring discounts of as much as 50 percent across more than 300 products.

Excluding video games, the U.K. toy and games market is estimated to be worth 3.08 billion pounds in 2016. Researcher Mintel found that last year, 39 percent of British shoppers bought a toy as a Christmas present.

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE