Budget battle wipes £2bn off value

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

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

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

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

Tesco’s total group sales jumped nearly 13 per cent to £28.3billion – or £1800 every second. Takings from March were boosted by their takeover of cash and carry giants Booker.

Operating profits leapt to £933million – but it was less than the near-£1billion 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 per cent drop in Tesco’s share price yesterday, wiping £2billionn off their £23billion stock market value.

Lewis, nicknamed Drastic Dave, insisted Tesco were “firmly on track” to hit their targets. They include growing profit margin to 3.5-4 per cent by 2020, from 2.9 per cent now.

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

He also revealed the group were 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 this option was “very limited” for fresh food.