Food giants row over 'lures'

A bitter "spat" erupted between Britain's two most powerful supermarkets yesterday after Tesco accused Sainsbury's of trying to lure its customers away.

The latest feud between the two companies locked in a long-standing battle for supermarket supremacy began when Tesco accused Sainsbury's of sending vouchers to households in key areas where competition is fierce.

Tesco, the UK's most profitable chain, retaliated to what it claims were rival mail shots to its shoppers by announcing that it would now accept Sainsbury's coupons in its stores. The latter, however, dismissed the response as a "desperate move".

"This is the latest spat where more expensive supermarkets try to lure our customers away," Tesco marketing director Tim Mason said.

"We're happy to be flexible and accept the vouchers they're sending to Tesco shoppers. It's not the first time we've done this, because it saves our customers a lot of hassle and expense," he added.

Competition between the big supermarket chains has intensified with the recent launch of the Nectar loyalty card.

Sainsbury's secured the right to be the sole grocer in the scheme, which ambitiously hopes to sign up half of the UK's households to the card in the first year.

Other companies involved in the scheme include Debenhams, BP and Barclaycard.

Last night a Sainsbury's spokeswoman dismissed Tesco's claim, insisting mailings were simply sent periodically throughout the year.

"We think this [response] is a pretty desperate move by Tesco," she said.

"It clearly shows how worried they are about the impact of Nectar and the overwhelming customer response we have had since it was launched two weeks ago."

Tesco said its policy of accepting vouchers from other companies, which began on Saturday, also applied to Safeway. However, a spokesman for the smaller chain said it was confused by this move, as it had not sent out money-off vouchers recently.