STORE wars were set to break out in East Lancashire today, knocking millions of pounds off supermarket prices.

Asda, which has five supermarkets in the area, announced it was slashing £30million off prices, with 600 price cuts which will include 100 top brands on its shelves.

The move was expected to draw further price cutting moves from Asda's rivals in East Lancashire including Tesco, Morrisons and Sainsburys.

The Asda announcement is the latest sign of aggressive US-style supermarket pricing being introduced to the group since it was taken over by the American chain Wal-Mart in June.

The £6.7billion takeover was widely seen as heralding the arrival of Wal-Mart's knock-down price strategy in Britain.

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 £200million.

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

Peter Hobkirk, president of Blackburn and District Chamber of Trade, today said he believed it was other supermarkets rather than smaller shopkeepers who had most to fear from the price cutting.

"The personal approach of small shops will aways attract customers. People don't shop there just on price," he stressed. But he warned East Lancashire shoppers not to be too excited about high profile price cutting moves by supermarket.

"Pricecutting is the norm in supermarkets. But they can always drop the prices one week and then put them up again a few weeks later when the fuss has died down."

Customer Service manager at Asda's Burnley store Penny Mortimer said the price cuts were good news for local shoppers.

"Asda's Rollback campaign has already cut the price of many goods but from Thursday shoppers will see a reduction in the price of 100 brand names and in their shopping bill at the check-out.

"It is great news for East Lancashire shoppers. This pricing policy is all part and parcel of the Wal-mart takeover. Wal-mart is America's biggest and best shopping chains and one of their slogans is actually 'We are the cheapest'. "Now they are passing savings on over here and it's great."

A spokeswoman for Morrisons Supermarket, Blackburn, refused to comment directly on Asda's price cuts but said: "From our point of view we have an ongoing Price Mission Plus campaign which guarantees low, low prices, week in, week out.

"Whenever you come to shop at Morrisons you get value-for-money shopping."

The price cuts were announced just two days after Asda said it was abandoning its pilot loyalty card scheme after research showed customers preferred lower prices to promotional schemes.

The move marked a break with the trend among supermarkets 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 £60million to extend to all its stores.

Shopping basket surveys have shown that a selection of typical products were up to 40 per cent more expensive in the UK than abroad.

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