Sainsbury's extends price pledge to online offer

LONDON (Reuters) - British supermarket chain Sainsbury's (SBRY.L) is to extend a price matching scheme to online orders, the latest salvo in an escalating industry price war.

The company, which trails market leader Tesco (TSCO.L) and is battling with Wal-Mart's (WMT.N) Asda to be Britain's second-largest grocer, said on Tuesday that it would expand its Brand Match scheme to online orders from Aug. 19.

The scheme, which was launched in stores in 2011, works by comparing Sainsbury's prices with similar branded groceries at Asda. If Asda is cheaper on a basket of at least 10 items Sainsbury's customers receive a money-off coupon for the difference that can be redeemed against their next shop.

The sales and profits of Britain's so called Big Four grocers, which also include Morrisons (MRW.L), have been dented by a fierce price war as the success of discounters Aldi [ALDIEI.UL] and Lidl [LIDUK.UL] has prompted them to slash prices and improve service. They have also been hurt by record commodity-led deflation.

When Sainsbury's launched Brand Match it compared its prices against both Asda and market leader Tesco (TSCO.L). However, it stopped comparisons with Tesco last October, arguing that Asda was seen as the benchmark on price.

News of the move came before Asda published second-quarter results on Tuesday.

In June Sainsbury's posted a sixth straight quarter of falling underlying sales but said it believed that its strategy was working.

Sainsbury's share price has fallen by 19 percent over the past year.

(Reporting by James Davey; Editing by David Goodman)