Supermarket giants Asda and Morrisons have launched a price war amid the cost of living crisis.
Meanwhile upmarket supermarket Waitrose has launched an advertising campaign pushing its lower cost Essential range for the first time.
Both chains announced sweeping reductions on everyday items in what is expected to be a battle for business as households look to make savings wherever they can.
Asda said it was pumping £73million into price cuts, along with a pay rise for workers.
Britain’s third biggest supermarket said it had “dropped and locked” the price of over 100 family favourites, and will keep the price of them down until the end of the year.
On average, Asda said prices will fall by 12%.
Meanwhile, Morrisons has cut the prices of hundreds of products including eggs, beef and nappies amid the rising cost of living.
The UK’s fourth-largest supermarket said it has lowered the cost of more than 500 products - including refrigerated, frozen and store cupboard food, meat and cereal - accounting for around 6% of its total volume of sales.
All eyes will be on how other supermarkets, including Tesco and Sainsbury’s, respond.
Tesco has already signalled that its profits this year could be dented by investing in price cuts.
However, one senior industry source suggested the scale of the price war could be muted given discount chains Aldi and Lidl missed out on a boost from online sales during the Covid lockdown and Asda and Morrisons are loaded with debt after recently being taken over.
It came as Asda’s latest Income Tracker recorded its biggest ever drop in disposable incomes in March.
The research found low income families had 74% less disposable income in March compared to the same time last year.
At the same time, experts are warning of the price of everything from beer and chicken, and pasta to sausages could jump amid because of shortages and spiralling wholesale costs.
Some supermarkets are already limiting how much sunflower oil, which is largely sourced from Ukraine, customers can buy.
And other shortages and punishing price rises are being felt in the food chain, with an inevitable knock-on effect on choice and household budgets.
Tim Lang, professor emeritus of food policy at City, University of London, said: ‘We are talking about rationing sunflower oil today, but it could be other products soon.”
Among Asda’s price cuts are staples such as John West tuna, dropping by 14% from £3.50 to £3, and 500g of Asda easy cook rice which has fallen by 25% down to 75p from £1.
The chain, now part owned by the Blackburn born billionaire Issa brothers, also confirmed to 120,000 hourly paid shop floor colleagues that their pay will increase to £10.10 per hour from July.
Mohsin Issa said: “We know that household budgets are being squeezed by an increasing cost of living and we are committed to doing everything we can to support our customers, colleagues and communities in these exceptionally tough times.”
Morrisons chief executive, David Potts, said its price drops would make a noticeable difference to consumers.
“We know that our customers are under real financial pressure at the moment and we want to play our part in helping them when it comes to the cost of grocery shopping,” he said.
A 30-pack of own-brand eggs will sell for £2.99 instead of the previous £3.40, while a pack of paracetamol will cost 29p, down from 65p.
Which? money expert Reena Sewraz said: "The UK’s largest supermarkets regularly show themselves to be more expensive than Aldi and Lidl in our research so it’s not surprising that they are now fighting for footfall and lowering their prices to regain a competitive edge.
“If you are looking to cut the cost of your grocery shopping, it is always worth shopping around, sticking to a shopping list and choosing unbranded products instead of branded ones.”
