SUPERMARKET giant Tesco confirmed this week it is squaring up for a fresh price-cutting war with discount rival Asda.

It is planning a package of reductions - said to be worth between £50 million and £70 million to the customer - as its struggle with Asda to capture the lion's share of the £100 billion UK shoppers spend in supermarkets every year continues.

Asda, meanwhile, has launched a new advertising campaign, "bursting with low prices", which is hitting our TV screens now.

For both, the stakes are high.

Latest figures from the Institute of Grocery Distributors reveal that over the last ten years both Tesco and Asda have been relentlessly increasing their share of the lucrative grocery retail market. Between December 1990 and December 1999 (the last year for which figures are available) Tesco increased its market share from 9.7 per cent to 15.6 per cent - passing Sainsbury's along the way to become the UK's largest supermarket retailer.

Asda has increased its market share in the same period from 6.8 per cent to 8.9 per cent, meaning it ranks third after Sainsbury's - whose market share is falling - in terms of sales.

Price wars, of course, should mean a better deal for the shopper. So as Tesco and Asda fight it out, we asked which of the two is really the best value?

With the help of young mum Elaine Brown, we compiled an average weekly shopping list - and then challenged the two chains to see how cheaply they could provide everything on it.

We hope most of the basics are on the list. Bread, margarine, orange juice, jam, fruit and veg, cereals, milk, meat, biscuits and some other necessaries such as kitchen towels, toothpaste, beer and disposable nappies. Mums will probably complain that there's no way they could feed a family of five on this: young couples might ask what on earth we've included disposable nappies for. We can't please everyone - but we hope at least that the list is a reasonable compromise.

The results of the price challenge were close. At Asda's Monks Cross store, staff were able to fill our shopping basket for just £18.32. That included a huge family cauliflower for 99p and a pack of four rather than two economy kitchen towels. The store's budget Herald lager came only in a four-pack rather than six-pack, as we'd asked - but at just 89p was phenomenal value. But then again, so was Tesco's four-pack of value lager, also 89p.

The overall bill at Tesco came out at just 61p more than at Asda, totalling £18.93. The supermarket chain had not arranged for its staff in York to take part in the price challenge by the time we needed to write the article, so an Evening Press reporter went to the Clifton Moor store instead and filled a shopping trolley, choosing all the budget and value items he could find. Great deals included a jar of instant coffee granules at 48p (the same as Asda) and a 500g bag of economy cornflakes at just 44p.

The real lesson is that if you're absolutely determined to get best value, it pays to shop around. Each store undercut the other on a number of items. Ten value sausages at Tesco were just 48p, compared to 99p for a pound of thick pork sausages at Asda; but a fresh whole chicken at Asda was just £1.99, compared to £2.36 at Tesco. Wendy Neale, spokeswoman for Asda's Monks Cross store said she was "delighted" with the result of the price challenge. "The even more good news is that our prices are set to come down even further," she said.

Tesco spokesperson Karen Marshall was equally upbeat. Research showed Tesco and Asda were neck and neck on prices, she said. "The next round of price cuts due soon will significantly lower the price of products at Tesco."

The bottom line is both stores offer good value if you're feeding a family on a budget - especially if you shop carefully and look for the best deals. And with the price wars still hotting up, prices will become even more competitive.