Price war hits Tesco shares Budget battle wipes £2bn off value

SUPERMARKET giant Tesco was yesterday left counting the cost of a price war with discount rivals after a £2billion share slump.

Boss Dave Lewis hailed its biggest rise in UK and Ireland sales for more than a decade – up 4.2% in the three months to August 25.

But profit margins here slipped as it introduced 300 Exclusively at Tesco products to compete with Aldi and Lidl.

Tesco recently ramped up its battle with the budget pair by launching standalone discount chain Jack’s.

Tesco’s total group sales jumped nearly 13% to £28.3billion – or £1,800 every second.

Takings from March were boosted by its takeover of cash and carry giant Booker.

Operating profits leapt to £933m – but it was less than the near£1bn analysts expected.

And Tesco’s overseas profits fell due to tough competition in Thailand, and Sunday trading restrictions in Poland.

It triggered an 8.6% drop in Tesco’s share price yesterday, wiping £2bn off its £23bn stock market value.

Lewis, nicknamed Drastic Dave, insisted Tesco was “firmly on track” to hit its targets. They include growing Tesco’s profit margin to 3.5-4% by 2020, from 2.9% now.

The Jack’s chain is one of a number of initiatives Lewis has launched, including a buying alliance with French giant Carrefour last July, which goes live this month.

He also revealed the group was preparing contingency plans for a no-deal Brexit, with worries over fresh food supply disruption being “the single biggest challenge”.

He said stockpiling of dry food was a possibility, but that this option was “very, very limited” for fresh food.