Tesco has today hit back at rival Asda’s price cuts with an investment of £100 million this month on a combination of permanent price cuts and promotions on more than 3,000 products.

Tesco’s money saving offers on everyday products include three for£10 on packs of meat and three for£3 on Hovis bread. From Wednesday, Tesco will also launch a new advertising campaign claiming it is the cheapest supermarket.

The move follows Asda’s new year price offers which it revealed last week, when it dropped its prices on 1,000 products, including a range of staple goods for just£1.

Tesco’s advertising campaign will feature online and in stores, offering customers information to help their money go further. It will compare prices of baskets of shopping with competitors Asda, Morrisons and Sainsbury’s.

Tesco commercial and marketing director Richard Brasher said: “This year the cost of shopping will be more important to customers than it has ever been and I believe they deserve to know the truth about who offers them the best value for their hard-earned cash.

“For years retailers have made claims and counter claims about who is the cheapest. But until now nobody has looked at what shoppers actually put in their shopping baskets to provide a true picture of what customers are really spending.

“Our new real baskets look at the actual products people buy every day including popular own brand items and essentials such as own brand milk, meat, fruit and vegetables so customers can be confident that our price claims reflect real shopping.”

Tesco claims results from a sample of shoppers on 2 January showed 1.1 million baskets were cheaper at Tesco than they would have been at Asda. And, the grocer claims, last year 1.5 million more baskets per day were also cheaper at Tesco than at Sainsbury’s and 1.2 million per day cheaper than Morrisons.

Separately, Tesco is facing two official investigations over claims that it deliberately advertised cut-price alcohol as "bait" to lure bargain-hunters, according to The Independent.

It is understood trading standards officers have launched an investigation into whether Tesco broke new laws by running special offers while failing to ensure it had enough stock to meet demand.

In a separate move, the Advertising Standards Authority (ASA) is said to be looking into whether Tesco broke advertising rules in the way that it promoted the offers and refused to remove banners at the front of stores despite not having the stock to sell.