Ocado has responded to the supermarket price war by cutting the price of several known-value items (KVIs).

The online grocer has cut prices of everyday items and created a £1 Essentials tab prominently displayed on the home page featuring six own-label medium eggs reduced from £1.30, four pints of own-label milk cut from £1.38 and a Roberts farmhouse white loaf down from £1.60.

Ocado has also cut the price of key fresh produce items such as broccoli, reduced last week from £1.50 to 69p, as well as onions, tomatoes, carrots and grapes.

In addition, it has cut the price of the two biggest selling alcohol lines by value - 1 litre bottles of Smirnoff Red Label and Bell’s Scotch whisky - reduced by 15% to £18 and £19 respectively.

Last month, Shore Capital analyst Clive Black warned that Ocado’s gross margins would come under pressure because it has pledged to match Tesco on all comparable shopping baskets through its Low Price Promise.