Tesco at Westlegate, Norwich.; Photo: Andy Darnell; Copy:; For: EDP; Archant © 2009 (01603) 772434

Tesco saw billions of pounds wiped from its shares today after the supermarket admitted it messed up its pricing strategy in a “disappointing” Christmas.

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The blue-chip stock slumped by an unprecedented 15pc - equivalent to more than £4bn - after chief executive Philip Clarke said the grocer had failed to pull in enough customers with its £500 million Big Price Drop campaign.

The update forced City analysts to slash their full-year profit forecasts by around 15pc and raised fears that the floundering UK performance over the festive period would hit future growth.

Tesco, which has 2,700 stores in the UK, reported a “disappointing” 2.3pc decline in like-for-like sales excluding VAT and petrol in the six weeks to January 7, which came in below its own expectations.

Mr Clarke, who joined as chief executive less than a year ago, said the supermarket wrongly pulled back on one-off promotions, such as meal deals and buy one, get one free offers, as its rivals increased them.

“I’ve got to acknowledge that we backed off on some of our promotion and coupon activity just as everyone upped it,” he said.