Supermarket price war escalates: Each grocery chain claims to be the cheapest in the battle for increased sales. Marianne Macdonald reports

RIVAL supermarket chains have each claimed the credit for Sainsbury's decision to escalate the price war by cutting the cost of 300 basic items.

The sniping follows research published this week that shows the average price of the cheapest everyday goods, bought in 18 different supermarkets and discount chains, fell by 11 per cent between September and October because of the increasingly fierce battles.

Superstores have responded to the threat posed by the discount chains by offering budget brand- names virtually unknown in the UK. Studies show these that are, on average, a third cheaper than well- known brands.

The pressure on them continues with the imminent arrival of the Costco chain in Britain, with promises of reductions that could cut the average family shopping bill by at least pounds 15 a week. A comparative 'shopping basket' of 14 products - ranging from baked beans and white bread to after-dinner mints and bananas - revealed surprising variations between the leading supermarkets yesterday. Orange juice, sugar and cornflakes varied by up to 50p in price.

Supermarkets said, however, that in some cases the prices were estimated: the chicken was given as a price per pound by several, and the quality of cheese or fruit was likely to vary.

Kwik Save, which has more than 820 stores, continued to claim yesterday it had always been the cheapest in Britain, partly thanks to its own-brand 'No Frills' range. A spokesman said: 'Kwik Save is Britain's number one discounter. We've always given our customers value for money. It would appear certain other retailers have noticed our success.'

But Safeway, which has 354 UK stores, also claimed the credit. 'As far as we are concerned, we feel that Sainsbury's are really reacting to what we've been doing throughout the year,' a spokesman said.

'We have about 500 everyday products on price promotion throughout the year. A lot of effort goes to ensure that our customers are not disadvantaged with prices of basic items compared to Sainsbury's'

Asda, which came out strongly in the sample shopping basket comparison, declared that its own price reductions had brought Sainsbury's to heel. 'It seems they are following our 5,000-product price freeze a week ago. We put out our show very early,' a spokesman for the chain, which has 200 stores, said.

Not to be outdone, Tesco also claimed responsibility. 'We introduced our own value lines back in July. We've always stocked economy products in our stores,' a spokesman said, emphasising that the lines were 'nutritious and wholesome' products, despite reports to the contrary.

'We offer basic economy lines across about 70 products, so who is responding to who?' he said.

Sainsbury's chairman, David Sainsbury, said the 300-product price cut announced this week as part of its 'Essential for Essentials' campaign was a signal that the group would concentrate on promoting the quality and value of its own brands.

But he denied the reason behind it was that the chain was being hit by competition from discount chains such as Kwik Save. Price- cutting by Asda and Tesco supermarkets had not had a noticeable impact, he claimed.

(Graphic omitted)