(Reuters) - Tesco delivered its first salvo in a fight back against the growth of discount supermarkets on Thursday by cutting the price of hundreds of branded products such as Hovis bread, Kellogg's cornflakes and Stella Artois lager.
Britain's biggest supermarket group, like rivals Asda, Sainsbury's and Morrisons, is losing sales to discounters Lidl and Aldi, whose limited ranges of low-priced products are increasingly popular with British shoppers.
Tesco brought in Dave Lewis in September to revive its fortunes but the former Unilever executive was immediately put on the back foot by an accounting scandal and profit downgrades.
He is due to outline his turnaround plan later on Thursday when he updates on trading. Analysts expect Tesco's UK like-for-like sales over Christmas to have fallen 2.0-4.3 percent.
The battle for Britain's grocery market is increasingly being fought on price, with all of the "big four" chains cutting the price of staples such as bread and milk.
Analysts have said Tesco is adrift from its rivals, with customers confused by a multitude of offers such as "buy-one-get-one-free" promotions.
Chief Customer Officer Jill Easterbrook said shoppers wanted to see changes. "One of the biggest things they've been saying is that they want prices which are simple, consistent and low," she said in a statement.
"The changes we're making today are a first step in that direction -- and we've focused on many of the favorite brands customers choose every day."
The average reduction on about 380 branded products would be around 25 percent, the company said, and the lower prices would be in all of its store formats from hypermarkets to convenience stores.
It did not give details on how it expected the price cuts to impact sales or profit margins.