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Tesco has cut prices on over 30 of its products, including bread and butterReuters

Tesco is stepping up its campaign in the supermarket price war as it announces a number of heavy discounts to some of its food products.

The British supermarket giant has wrestled with a weakening financial performance, the horsemeat scandal, and the cost of living squeeze which has gripped household finances.

It is the latter which has driven the intense price competition between the big supermarkets in the UK as they battle to draw in cost-conscious consumers.

Britons have seen welfare payments slashed and incomes fall in real terms as price inflation outpaces wage growth.

Tesco, whose share of the UK grocery market is at its lowest in almost a decade, cut prices on over 30 products, including bread, eggs, butter and bacon.

It has knocked 38p off the price of a box of six free range medium eggs to a £1 tag and reduced butter by 49p to £1. The firm will also offer some £1 home delivery slots.

There is increasing competition for Tesco at both ends of the grocery market.

The likes of Aldi and Lidl are ramping up the price pressure at the bottom, while Waitrose and Marks and Spencer are offering tough competition at the top end, where Tesco markets its finest range.

Tesco blamed "challenges in UK and Europe" for a year-on-year drop in profit, which fell by 6% to £3.3bn in 2013.

Yet another fall in profit led to calls from investors for Tesco's chief executive, Philip Clarke, to step down.

The company's finance boss, Laurie McIlwee, had already quit ahead of the annual results.

Since January 2013, Tesco has pumped hundreds of millions of pounds into a brand refresh and refurbishing stores.

This was after it was rocked by the horsemeat scandal in early 2013, when traces of horse DNA was found in some of the meat products being sold.

And Tesco shuttered its US operation, called Fresh & Easy, after it failed to deliver a single year's profit since its launch in 2007 – despite swallowing £1bn.