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Monday, August 9, 1999 Published at 07:08 GMT 08:08 UK

Business: The Company File

Asda cuts herald Wal-Mart arrival

Asda is stepping up its price cutting strategy

US retailing giant Wal-Mart is being seen as the force behind Asda's decision to step up the price war among UK supermarkets.

Asda, taken over by Wal-Mart in June for 6.7bn, is slashing another 30m off prices.

The 600 price cuts, which will include 100 top brands on Asda shelves, are being seen as the latest signs of aggressive US-style supermarket pricing.

Rival chain and market leader Tesco has already cut its prices ahead of the long awaited arrival of Wal-Mart's knock-down price strategy in the UK.

Loyalty cards

The latest cuts are part of Asda's Rollback campaign, which has set a target of cutting prices on 4,000 products this year at a total cost of 200m.

The supermarket war between Asda, third in the league, and the two larger chains, Tesco and Sainsbury, comes as the entire supermarket industry's pricing is being investigated by the Competition Commission.

Asda's price cuts come two days after it said it was abandoning its pilot loyalty card scheme, following research which showed customers preferred lower prices to promotional schemes.

This decision marked a break with the trend, which has seen every other leading supermarket chain introduce loyalty card schemes.

The latest round of price cuts will be partly made up by abandoning the loyalty card scheme, which would have cost about 60m to extend to all its stores.

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