Tesco, Britain’s biggest grocer, has opted to cut its prices more quickly to prevent Asda grabbing market share

Sainsbury's has forecast that shop profits will flatline or fall in the coming year as the supermarket sector prepares for a possible price war. The retailer said it expects income to dip to £1bn as it continues to invest in lowering grocery prices.

Tesco , Britain's biggest food retailer, warned on Thursday its profit would likely fall this year as it set aside cash to deal with a step up in the "competitive intensity" of the market, sending its shares down over 6%.