Tesco launches £500m UK price war

The UK’s biggest supermarket, Tesco, started its price war today after cutting the cost of 3,000 products as part of a £500m (€575m) campaign.

Some 14,000 staff across the UK changed nearly three million labels over the weekend on items such as milk, bread, and fruit and vegetables.

Tesco, which has lost market share in recent weeks as cash-strapped consumers shop around for the best deals, will cover the price cuts by slashing the number of multi-buy promotions and scrapping its double Clubcard points reward offer, meaning the scheme will revert to one point for every pound spent.

The price offensive is expected to trigger an aggressive response from Asda and Sainsbury’s, which both accused the market leader of using spin tactics, as well as from fourth-place rival Morrisons.

Tesco’s market share slipped to 30.4% from 30.8% in the three months to September 4, according to retail analyst Kantar, while Sainsbury’s and Morrisons saw slight gains.

The cuts come as UK households are struggling with the biggest squeeze on income since the 1920s, driven by high inflation and muted wage growth.