Tesco is promising consumers in the Irish Republic that by early next year it will have cut the price of 10,000 food items previously covered by the groceries order.

In a major advertising blitz, titled The Promise - The Proof, it claims to have reduced prices on 5,000 products since May, including staples such as bread, butter, eggs and coffee. It adds that a similar number of cuts will be implemented over the coming months.

Posters showing the reductions - said by the company to average 4.7% - are being displayed in its 94 stores across the Republic.

Tesco spokesman Dermot Breen said: "This price-reduction programme is the most significant ever undertaken in the Irish supermarket industry. It means that the prices of 5,000 grocery products are lower than six months ago, despite national inflation currently being over 4%."

No prices had been increased to compensate for the reductions, he said, adding that the cuts would remain in place "for a number of months at least".

When the groceries order, which banned below-cost selling of groceries, was abolished seven months ago, it was expected that price cuts would be immediate and permanent.

The chair of the National Consumer Agency, Ann Fitzgerald, welcomed the move by Tesco, but said she was disappointed consumers had not benefited more quickly from the rescinding of the order.

Most supermarkets and convenience chains, she claimed, did not seem to be competing on price, as had been predicted would happen. "I would have expected to see competition on price happen much more quickly. Consumers are still paying more than they should."

With a 26% market share, Tesco is the dominant player in the Irish grocery sector. Its biggest local rival is Dunnes Stores, which has a 22% share. The question now is whether Dunnes will match Tesco's latest cuts, sparking the price war forecast by pundits when the groceries order was lifted.

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