Tesco's new boss has pledged to slash prices in a bid to compete with the rapidly-growing discount retailers.
Chief executive Dave Lewis acknowledged that Tesco's prices have become too high for consumers, especially compared to Lidl and Aldi.
"The price gap without doubt was too great", he told the Daily Mail, adding that he wanted Tesco "to be competitive at all ends of the market... including the opening price point in every category."
Overhauling the business
The price cuts are part of a wider shakeup of the business being undertaken by Lewis, who joined Tesco from Unilever in 2014.
In January, he revealed plans to cut head-office costs by 30%. Additionally, 43 unprofitable stores will close and the plans for 49 new stores have been halted, the Independent reports.
Reducing the total debt of £22 billion, which includes the pension deficit and the costs of capitalised long leases, will be one of the biggest challenges facing Lewis this year.
Marginal companies like the film streaming service, Blinkbox and loyalty card processor Dunnhumby have also been sold off. According to the Independent, TalkTalk bought Blinkbox and Tesco Broadband and are planning on incorporating the businesses into their online TV technology.
Lewis sees Tesco Bank as an integral part of the supermarket's future, believing that its 'model of simplicity' is a promising opportunity.
He told the Daily Mail: "It's a good performing asset and when I look at what the customers think, they really like the bank. The question for us is could the bank do more for the rejuvenation of the brand that we've invited it to do up to now?"