The ongoing price war between Tesco and Asda took a new twist today with a new survey claiming Tesco to be cheapest - particularly in fresh produce.

The study, by bankers Goldman Sachs, has been carried out monthly since December 2001 and this month, for the first time, it has found the UK’s number one retailer to be cheaper than its Leed-based rival.

The survey flies in the face of other studies, such as The Grocer magazines’ Grocer 33 survey, which for the last eight years has found Asda to be the cheapest for a basket of goods.

A complaint to advertising chiefs by Tesco was recently upheld over Asda’s advertising claims of being “officially Britain’s cheapest supermarket”, however, the retailer had stopped making the claim some months before, leaving Tesco with a hollow victory.

Goldman Sachs said that Tesco was more competitive than Asda on fresh produce, dry groceries and frozen foods. However, overall, the survey showed Tesco to be only 0.2 per cent cheaper than its rival.

The news is expected to spark off a fresh round of price cuts between the two retailers, both of which have already invested more than £200 million in cuts so far this year.

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