Britain's Wm Morrison Supermarkets sparked talk of an industry price war today after it posted its lowest profit for five years and said it would invest £1 billion in price cuts over three years in a bid to recover.

Britain's No 4 grocer, which has been losing market share to discounters Aldi and Lidl and lagged rivals in entering fast-growing online and convenience store markets, said its profits would more than halve this year as it tries to restore its low-price image, sending its shares plunging to an eight-year low.

Shares in bigger rivals Tesco and J Sainsbury also fell heavily, with about £2 billion wiped off the combined stock market value of the three groups.

Jefferies analysts said the scale of Morrisons' price investment was equivalent to "getting the bazooka out".
– (Reuters)