Tesco expects to make lower profits this year, between £2.7bn and £3bn, compared with £3.1bn the previous year. The company says it is more competitive on price than ever but is facing increased competition in the UK market. Tesco’s share price plummeted last month after Asda launched big price cuts. The supermarket says it has seen a rise in “competitive intensity” in the UK market and that profits may fall due to this. Prior to Tesco’s results update, analysts had forecast an average profit prediction of £3.2bn. Tesco is committed to giving customers the best value and is focused on protecting its competitiveness. Some analysts have doubted Asda’s price cut move will spark a price war, but others say there are signs that a price war is possible. Tesco is also facing increased costs due to National Insurance and minimum wage rises.
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