UPDATE 1-Britain's Sainsbury's to match hundreds of Aldi prices

(Adds detail, Aldi comment)

LONDON, Feb 10 (Reuters) - Britain’s second largest supermarket group, Sainsbury’s, will start price matching discounter Aldi on hundreds of products, firing the latest salvo in the UK’s highly competitive grocery market.

Sainsbury’s said on Wednesday it would match the German-owned discounter’s prices on around 250 equivalent products, including meat, chicken, fresh fruit, vegetables and dairy.

It follows a similar initiative from market leader Tesco last year.

Aldi immediately dismissed Sainsbury’s move. “Shoppers know that the only place you can get Aldi prices is at Aldi,” it said.

Sainsbury’s said its price matching will cover both Sainsbury’s and branded products.

Examples include a 225 gram ‘by Sainsbury’s’ 21 day matured rump steak, cut to 2.32 pounds ($3.21) from 2.50 pounds and ‘by Sainsbury’s’ pita bread cut to 35 pence from 45 pence.

The price initiative forms part of new CEO Simon Roberts’ updated strategy, announced in November, to focus more on food.

Sainsbury’s has a 15.7% share of the UK grocery market, according to the latest industry data, but it has been chipped away over the last decade by Aldi and rival discounter Lidl, who have been aggressively opening new stores and now have a combined 13.3%.

All of Britain’s big four supermarket groups - Tesco, Sainsbury’s, Asda and Morrisons - have been cutting prices to narrow their price gap with the discounters.

Tesco launched its “Aldi Price Match” scheme last March.

In 2016, Sainsbury’s abandoned a price matching scheme on branded goods (“Brand Match”) that had run for five years.

$1 = 0.7226 pounds Reporting by James Davey; editing by Jason Neely, Kirsten Donovan