TESCO'S battle for pre-Christmas trade and TUI Travel's efforts to weather the storm in the holidays sector will be in focus this week.

The UK’s biggest supermarket, Tesco will reveal for the first time the impact of its £500m Big Price Drop campaign, which saw the cost of 3,000 items slashed, in a trading update on Thursday.

Tesco, which has more than 2,700 stores in the UK, fired the first shots of a price war at the end of September, in a bid to maintain market share in the run up to the crucial Christmas period.

The offensive triggered an aggressive response as competitors soon responded with their own schemes, such as Sainsbury’s Brand Match campaign and Asda’s move to bring petrol pump prices down.

Tesco revealed its worst sales performance in two decades at the half-year stage, with sales excluding new store space, VAT and petrol down 0.9%, but this covered the period before the new price-cutting campaign kicked in.

However, Rod Salmon, an analyst at brokers Numis Securities, does not expect any change in the trading situation as the impact of the campaign will have been diluted by both the deteriorating economic climate and moves made by competitors.