Bradford-based Morrisons has accused market leader Tesco of misleading shoppers over price comparisons and is threatening to report its rival to the advertising watchdog.

Morrisons has hit out at Tesco’s Price Promise promotion which promises to recompense customers if they can buy equivalent goods more cheaply at a rival store chain.

The Bradford retailer is considering taking a complaint about Tesco’s ‘promise’ to the Advertising Standards Authority for incorrectly comparing the price of Tesco products with Morrisons products - but under the rules must try and settle the dispute directly with Tesco first.

Morrisons claims the Tesco promotion is misleading customers into thinking that Tesco will always compensate them if they shop at Tesco but Morrisons is cheaper. The promise works by comparing a shopper’s basket with prices from other supermarkets.

The criticism by the UK’s fourth largest supermarket comes after the advertising standards watchdog launched a probe into the Tesco ‘price promise’ last month, following a complaint from Sainsbury’s.

Morrisons said it had found that Tesco is unable to compare its prices in many cases and lists Morrisons prices as ‘not available’. It said this could be because Tesco could only check Morrisons manually through mystery shopping until Morrisons launches its online food shopping operation which is still months away.

Morrisons accused Tesco of flawed methodology which meant that five Morrisons products were left out of the promise calculation but when included, a basket of Morrisons groceries was more than £1 cheaper.

Morrisons customer director Crawford Davidson said: “We are complaining because Tesco’s Price Promise provides a false assurance that it will compensate customers when Morrisons is cheaper, which it mostly is. Customers expect Tesco to do this properly. If Tesco can’t accurately collect prices of its rivals and make trustworthy comparisons, then it should not be making this so-called promise.”

Morrisons pointed out that the Committee of Advertising Practice Code included specific guidance on price comparisons stated that such marketing communication should not mislead consumers.

Morrisons has contacted Tesco about its concerns.

“If the ASA upholds Morrisons complaint it could order Tesco to end the promotion.”

As UK supermarkets remain locked in a fierce battle for customers, Morrisons has confirmed that it has added around 200,000 sq ft of across the UK in the first quarter of 2013 as it moves to increase total sales space by two million sq ft within the next three years.

Expansion is focused in the convenience store sector and London and the south east where Morrisons is under-represented.

Tony Hartwell, Morrisons group property director, said: “By adding over 200,000 sq ft to our footprint in the first three months of 2013 alone, we’re sending a clear message to our customers and to the property market that we’re keen to acquire more stores and more sites right across the UK.”