Tesco launches new price-cuts war

A NEW supermarkets price war is set to break out after Tesco announced it is slashing £80m off hundreds of products across its stores from Monday.

The grocery giant is cutting the price of 500 products, focusing on goods that customers buy as part of their everyday shopping.

These include meat, ready meals, frozen foods, and health and beauty. It claims that customers can save 9% on the cost of a basket of 25 products.

The latest cuts come after Tesco invested more than £219m in bringing prices down in 2004, helping underline its status as Britain's number one supermarkets group.

Tesco director Tim Mason said: 'As our Christmas special offers come to a close, we know how important it is to keep our everyday prices low. Customers know that every other area of their life has got more expensive, but their Tesco shopping trip has actually got cheaper. And, at this time of year, that is really important.'

To coincide with the latest round of price cuts, Tesco is launching a new TV advertising campaign to highlight its internet Price Checker system, which allows shoppers to compare its prices with those of rivals Asda, Sainsbury's and Wm Morrison.

The move comes just weeks after the Office for Fair Trading confirmed that Tesco and Sainsbury's were being investigated over allegations that online shoppers are being overcharged.

Earlier this month, Tesco triggered a price war in CDs and DVDs after it set up an internet shopping service on Jersey, allowing British customers to make purchases without paying VAT.

Meanwhile, the corks are popping as Champagne sales hit new records. Bubbly is fizzing off the Tesco shelves and the group reckons it will sell around 4m bottles over the festive season - up a quarter on the same period last year.

Despite scares over possible shortages in the run-up to Christmas, Sainsbury is likely to off-load around 2m bottles of half-price Champagne. Stores from Pimlico to Brighton were reported to be running dry. But it seems that boss Justin King got the lorries rolling in time to meet the New Year's Eve rush. 'We've still got plenty of supplies,' said a spokesman.

Supermarkets have brought Champagne to the masses. Nowadays a good-quality bottle can cost as little as £15 - or in the case of Sainsbury this Christmas just £7.49.