MORRISONS has today taken the price fight to discounters Aldi and Lidl which have been eroding its share of the grocery market.

The Bradford-based retailer, which has more than 500 stores, has become the first of the big four supermarkets to pledge a price match guarantee against the discounters .

Morrisons is launching a new loyalty card scheme which it says will see customers given additional points if their comparable shop would have been cheaper elsewhere.

It is part of a three year plan to invest £1 billion in price cuts as chief executive Dalton Philips battles sliding sales and plunging profits. Morrisons recently announced a 51 per cent slump in half year profits to £181 million while like-for-like sales fell 7.4 per cent .

Mr Philips said: "In May, we announced that we were lowering our prices permanently. Now we’re launching Match & More, the most comprehensive price match and points scheme in the UK. Because it price matches the discounters, the Match & More card will provide the ultimate guarantee about Morrisons' value-for-money. "

Morrisons said the offer was the first of its kind to provide a price match guarantee against Aldi and Lidl as well as Tesco, Sainsbury's and Asda.

It comes after the group said in May that it was lowering prices permanently.

Sainsbury's new boss Mike Coupe said this week the supermarket sector was facing its most turbulent period in three decades amid the price war, as he slashed sales forecasts for the year.

Morrisons said its new scheme would work by automatically checking all the products in customers' shopping baskets against a database of thousands of prices collected by independent pricing experts.

Customers will have to be part of the loyalty card scheme to benefit. The cardis being launched in a phased roll-out which the group said would see them in stores in time for the Christmas season.

The card will also offer additional points on hundreds of products across stores, plus ten points on every litre of fuel bought at Morrisons petrol stations. Accumulating 5,000 points will entitle shoppers to a £5 voucher at the till.

Morrisons said it also plans to enable customers to turn points into vouchers for leisure activities such as eating out and travelling.

Its introduction of the loyalty card scheme - following pilots earlier this year which saw 40,000 customers sign up - follows behind its rivals.

The retailer has overhauled its antiquated IT infrastructure which Mr Philips admitted last year had made it difficult to plan promotions.