Media reports over the weekend suggest that a new supermarket price war is on the cards - with Asda reportedly planning cuts of more than £100 million and Tesco expected to follow suit.
Tesco and Asda account for a combined 46 per cent of the UK supermarket spend.
Asda is keen to keep hold of the title of Britain's cheapest supermarket and will therefore reduce prices across its entire range of goods. Tesco has revealed plans to in vest £67m in 300 price cuts across its UK network.
The FT today reports that the new wave of cuts will bring Tesco's spend since last April to £297m. Asda has slashed its prices by £231m in the same period.
While many of the cuts are focused on non-food, analysts believe that the aim of the big two is to pile more pressure on Morrisons, which has been widely reported as struggling to integrate Safeway effectively into its portfolio. The hugely competitive marketplace has been blamed for profit warnings by Morrisons; it has also been cited by Sainsbury's and M&S within the last couple of months as the major reason behind below par performances.
Meanwhile, the Sunday Times reported Lansdowne Partners, one of the UK's most successful hedge funds, has bought more than one per cent of Tesco, saying its shares are undervalued.
The buy is thought to represent more than 10 per cent of Lansdowne's UK fund. Tesco is expected to unveill a record annual profit of £2 billion on April 12, but its shares are still rated lower than Sainsbury's and William Morrison.
And on another front, The Independent on Sunday said property tycoons Ian and Richard Livingstone are putting £100m into a bid to buy Somerfield.
The two are said to have teamed up with Japanese Bank Nomura to launch a bid for the supermarket.
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