Tesco has unveiled plans for £200 million of price cuts as it said it would open 150 convenience stores a year under plans to halt sliding sales in Britain.
The supermarket giant pledged to end "frivolous" promotions and invest in long-term price cuts to lure customers back after losing out to the likes of discounters Aldi and Lidl in 2013 and over the crucial Christmas period.
In a strategy update to London analysts, chief executive Philip Clarke admitted Tesco "didn't change enough" in recent years, but said the group was ramping up turnaround efforts to slash spending on larger store expansion and focus efforts online and on its convenience store estate.
He said there was no need for a "new strategy, but to go faster for customers and faster to improve".
"Prices must get better. They must be more stable. Frivolous promotions must end," he added.
Tesco will accelerate existing cuts to store space growth by halving expansion from around 1.4 million square feet in the current financial year to 700,000 square feet in 2014/15.
This is down from 2.5 million additional square feet of store space a year at the peak of the so-called supermarket "space race".
It will rein in annual spending to no more than £2.5 billion for at least the next three years as a result of the dramatic reduction in store expansion - nearly half the £4.7 billion spent in 2008/09.
Instead of snapping up land for new superstores, it will spend £500 million a year on revamping its entire store chain within the next three years, starting with its Extra stores as a priority.
The group revealed that its large stores suffered particularly badly over Christmas, with sales at the sites slumping by 3.1%, while online grocery sales rose 10% and convenience store trade increase by 1%.
Tesco has been under pressure after seeing its first annual profits fall in nearly 20 years, with sales growth since failing to turn around in a difficult market.
It posted a 2.3% slide in sales over Christmas, while discounters and premium retailer Waitrose fared far better.
Tesco plans to overhaul its general merchandise offering, with a new look and overhauled range starting to be rolled out from this spring/summer and due to be completed in the autumn.
It will also offer free click and collect services for non-food and grocery shops this year and double the number of collection points.
The group has already said it will sacrifice its industry leading profit margin of 5.2% to turn its fortunes around, saying at last year's interim results it could come down as low as 4.8%.
