Tesco kicks off price war

TESCO has kicked off a price war with rivals, announcing that it plans to splash out £500m on dropping prices on 3,000 food items.

In an aggressive attempt to outflank the competition, the supermarket giant has vowed to focus the campaign on cheap, everyday products and to scrap complex promotions in favour of across-the-board price changes.

Richard Brasher, the company’s UK chief executive, said: “My message to our customers in these tough times is clear – we have listened and we are going to help. From Monday, you will be able to save more money everyday at Tesco on the essentials you need the most.”

Shore Capital analysts estimate that the price war will be “most problematic” for Sainsbury’s and Ocado – the latter in particular because it promises to match Tesco’s prices on its goods.