Tesco starts supermarket price war in UK

Competition among supermarket groups is set to hot up, after Tesco announced plans to slash £80m (€123m) from prices of everyday items.

The group said the cuts, which will come into force across its stores in the UK from Monday would apply to more than 1,000 products with some prices falling by more than 30%.

Tesco said the cuts would apply to ranges of fresh pasta, bottled water, oriental sauces and quiches, pizzas, crisps, milkshakes as well as skin and hair care products, razor blades and toothpaste.

Tesco director John Gildersleeve said: "Lots of customers are telling us they need to tighten their belts this year. We've listened and taken pounds off their shopping in a bid to help."

The cuts came as rival Asda also said it was slashing selected prices in its George clothing range from Monday.

A spokeswoman for Asda said: "They are permanent price cuts. It is part of an ongoing commitment to pass any savings we can make back to customers. The reason we can do this is because we were bought by Wal-Mart in 1999 so we have much more buying power."

The cuts echo memories of the supermarket price wars played out in 1999 as stores fought to capture more customers and increased market share.

A report in the Sunday Telegraph said news of the price cuts would raise fears that Sainsbury's and Safeway would lose market share this year to Tesco and Asda, while smaller chains, including Big Food Group and Somerfield were also vulnerable to a price war.