Supermarket giant Asda blamed its strong presence in the economically weaker northern part of the UK as well as its price cuts for a mere 0.3% rise in like-for-like sales in its third quarter as it lost market share.
Britain's second largest grocer unveiled a £1 billion price cutting plan for the next five years as it seeks to build a market position between the other big chains and fast-growing disounters such as Aldi.
Chief executive Andy Clarke said: "In the north versus the south it feels very different."
He forecast a "challenging" economy for the next five years.
The chain accused its rivals of hiking prices to fund discount vouchers.
"We are out of vouchering," he said, with Asda instead focusing on cutting prices.
Mr Clarke attacked growing profit margins in the supermarket sector as "unsustainable", highlighting continuing falls in the volume of grocery sales.
Store openings will be focused on the booming south of England as Mr Clarke aims to extend Asda's reach from 52% to 70% of the UK population.
It will quadruple its "click and collect" outlets for online shoppers to a thousand, including to places that are not Asda stores.
It is also to focus on areas such as health and well-being which the chain thinks could be lucrative.
Some £250 million will be spent improving its brand quality and style.
"For the next 12 months we will broadly hold market share and after that make share gains," Mr Clarke said.
He added: "This is a fundamental restructuring of the market.
"We are going to re-define 'value' for UK retailers, he said with Asda planning to "re-base" its pricing at a lower level.
The group has also made a U-turn on its resistance to following its main rivals in opening small convenience stores.
It will look at expanding into this area from 2017, but Mr Clarke said any convenience stores it opens will charge the same prices as its supermarkets.
Asda is poised to continue its aggressive stance towards its rivals revealed in its Christmas advertising campaign.
It will take on market leader Tesco directly by running "spot the difference" adverts highlighting price differences between the two groups.
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