Iceland has waded into the grocery marketing battle with a new money-off coupon.

The frozen food specialist is offering £5 off shoppers next £25 shop. Customers will receive a voucher when they spend £25 in store.

Promotional coupons have become crucial in winning customer spend in the last year with Asda and Tesco wrestling for shoppers.

Iceland’s offer, supported by national press ads, is promoted under the strapline ‘More for your Money at Iceland’ and runs alongside its traditional round-pound deals.

On Monday Tesco launched a £10 off when you spend £80 deal just five days after its chief executive Philip Clarke said he does “not like the blanket £5 off £40” offer.

Asda ran the £5 off a £40 spend promotion at Christmas and Tesco responded with an identical deal in February.

Coupons have been used to target cash-strapped consumers. Fears rose yesterday that consumer confidence would be hit by news that the UK has slipped into recession.

Shore Capital analyst Clive Black said: “Stable to rising confidence is a pre-condition for improvement in the UK consumer economy but it has to be based on something real to be sustained; so rising real incomes, improving job prospects and growing wealth. Recession pushes our such a possibility ever further.”