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Shares in British supermarkets dipped on Friday after US giant Amazon announced that it would slash prices at its newly acquired Whole Foods grocery chain.

The 13.7 billion US dollars (£10.7 billion) deal will see it take over Whole Foods operations in America and in the UK, where it has nine stores.

From Monday, when the takeover completes, products such as bananas, avocados, eggs, salmon, organic baby kale and rotisserie chicken will see price cuts.

In addition, a selection of Whole Foods products will be available on AmazonFresh, the firm’s online supermarket which delivers to 302 postcodes across London and the South East.

Shares in Britain’s listed supermarkets followed their US peers into negative territory off the back of the news.

Tesco was down nearly 2%, Sainsbury’s dropped 1.2%, Marks & Spencer fell 1% and Morrisons was down 1.2% in morning trading.

Jeff Wilke, chief executive of Amazon Worldwide Consumer, said the firm is “determined” to make healthy and organic food affordable for everyone, and warned “this is just the beginning” as he pledged to “continuously lower prices”.

Britain’s so-called Big Four supermarkets – Tesco, Sainsbury’s, Asda and Morrisons – are already reeling from an assault on their market share by discount rivals Aldi and Lidl, with the duo sparking a bitter price war that has eroded profit margins.

The emergence of another player with significant firepower is likely to pile further pressure on the sector.

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