Tesco has heralded a new supermarket war by announcing price cuts worth £70 million.

The UK's largest supermarket chain said the reductions will see prices on 450 products fall by an average 11 per cent.

Competition between rival supermarkets is always intense but analysts predict Morrisons' £3 billion takeover of Safeway will spark a price war on a scale not seen before.

Last month, Asda announced £65 million of price cuts on lines such as gardening equipment and furniture in time for the Easter break.

Tesco claims to have passed more than £1.3 billion of savings on to customers since 1996.

Steve Gotham, retail analyst at Verdict Research, predicted record savings for shoppers before Morrisons' takeover of Safeway.

He said: "It is inevitable the likes of Asda and Tesco will come up with spoiling tactics to try to prevent customers switching to Morrisons when it starts converting some of the Safeway stores.

"Specific retailers may have offered big savings in the past but the level of price cuts from all the major players will be at a record high this year.

"The reductions will be substantial and the consumer will be the real winner."

Tim Mason, marketing director at Tesco, said: "What is unique about Tesco is that you get the best prices without having to make sacrifices on quality or service."

Monday April 19, 2004