Tesco , Britain's biggest food retailer, warned on Thursday its profit would likely fall this year as it set aside cash to deal with a step up in the "competitive intensity" of the market, sending its shares down over 6%.

Tesco’s cost cuts can’t offset shrinking U.K. margins, as pricing turns more competitive in a tough market. Find out why TSCDF stock is a hold.

Its forecasting profits of between £2.7bn and £3bn compared with the £3.1bn it made for the financial year that's just ended.