Revealed: The true extent of Tesco's 'Big Price Drop'

The supermarket giant, which cut prices on 26 September, said at the time it was investing more than £500m to provide "immediate help for families" by cutting the price of thousands of essential items such as milk, pasta, fruit and vegetables.

Data from online grocery firm Mysupermarket.co.uk, which consumers can use to find the cheapest supermarket for their shopping, shows the cost of an average Tesco grocery basket fell by £2.11 over the five weeks after the Big Price Drop, compared to the five weeks before – a 2.5% reduction.

While the figures show a fall in prices, they do not take into account the cut in benefits for Clubcard users which would have amounted to between 1% and 3% depending on how customers spend their points from the supermarket's loyalty scheme.

Much of the reduction was in week one after the  promotion, as expected, yet costs had soared in the week before the Big Price Drop.

Supermarkets are often accused of raising prices before a fall to exaggerate price drop claims, though Tesco stresses it did nothing of the sort this time.

Four weeks after the reduction, typical costs had already returned to pre-drop levels.

To get the figures, Mysupermarket found the average cost of every Tesco shopping basket its users searched for on its price comparison site in the five weeks before and the five weeks after the Big Price Drop.

There were around 4,500 baskets sampled each week, so the website based its figures on around 45,000 baskets.

Mysupermarket's key findings were:

• The average cost of a Tesco basket in the five weeks before the price drop was £85.73, compared to £83.62 in the five weeks after the Big Price Drop. That's a 2.5% fall.

• On 25 September, the day before the drop, the average basket cost £88.14, compared to £85.61 the week before – 2.9% more.

• The price then fell the week after the price drop to £82.70 – a 6.17% week-on-week fall.

• Within a few weeks, the typical basket had already exceeded the £85.61 cost the week before the drop. On 23 October, the typical cost was £85.96.

Clubcard benefits cut

Since 24 October, shoppers have earned one point per pound spent rather than the previous two.

One point is worth 1p to spend in-store, so is worth an initial 1%. However, points can be trebled or quadrupled to use on Clubcard Rewards to spend on restaurants, days out and more.

Martin Lewis, MoneySavingExpert.com creator, says: "This data indicates a price cut of 2.5%, but remember that comes at the cost of losing Clubcard points worth 1% back when redeemed in-store.

"However, those Clubcard chasers who lust after points deliberately to convert them into Clubcard Rewards are losing out by even more.  "This is because points are typically worth three times their value when redeemed this way, so that's 3% back.

"In other words, while most people felt a small price cut, some actually will have less money in their pockets as the reduction at the till doesn't make up for their loss of points."

James Foord, from Mysupermarket, says: "We always welcome price cut initiatives by the retailers but despite big claims and huge amounts of advertising things are not always what they seem.  

"With so many different promotions, deals and claims by all the retailers it's very confusing for the consumer to work out where the best deals truly are."

How representative are the figures?

Given Mysupermarket's sample is about 45,000 baskets it is about as robust as you can get when judging overall Tesco prices in isolation over the period in question.

However, the Big Price Drop does not cover all items, nor was it dressed up as doing so. It only covers what Tesco describes as essential items. On those products, Tesco says the typical price fall is over 10%.

Also, when you make your mind up about the sincerity of Tesco's Big Price Drop claims, remember that the price of groceries can fluctuate wildly per day.

Therefore, a rise one week or a fall the next can be down to either a supermarket's policy or the cost of the commodities it buys, the rise or fall of which it is likely to pass on.

What Tesco says

A Tesco spokesman says: "This survey looks at an average shopping trolley in excess of £80, a very high basket size reflecting that Mysupermarket shoppers have different shopping  behaviour to those who visit our stores. The average price cut on the thousands of products in the Big Price Drop is over 10%.

"Comparing baskets from different times of the year also fails to take into account that shoppers' spending habits will alter according to seasonality.

"The Big Price Drop was launched in a period of significant inflation caused by factors including, but not limited to, higher commodity  prices and fuel costs, which increase the costs of food production and distribution.

"It is therefore not surprising that the prices of some goods rose in the weeks before the Big Price Drop.

"The purpose of the Big Price Drop is to combat inflation for our customers, not to eliminate it."