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Tesco and Asda go head-to-head in price war

It has been revealed that Tesco and Asda are set to implement significant price reductions on thousands of products in a move which will further infuriate independent retailers who have been struggling to survive of late. Asda has announced plans to reduce prices on a further 5,000 lines (bringing the total number of price reductions to 12,500 since the start of the year) while Tesco has announced a further 3,000 price reductions in the short term.



Tesco and Asda are again leading the way in the UK with many analysts now predicting a price war which could seriously undermine the potential performance of competing supermarkets. While the likes of Sainsbury and Morrisons had been performed very well of late there is concern that they may not be able to keep pace with the ever-increasing number of price cuts announced by Asda and Tesco.



In the short term there is no doubt that UK consumers will benefit from the ongoing price reductions but longer term there are concerns that Asda and Tesco will increase their dominance of the UK supermarket sector which could in due course reduced competition for these two leading companies. It appears to be a case of short-term gain with a potential medium to longer term reduction in competition but with most UK consumers struggling now, these reductions will no doubt be welcomed with open arms.

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