Sainsbury's is attempting to lower its prices by asking its suppliers to cut their costs by five per cent.

In a bid to turn its fortunes around the retailer is hoping to pass the savings onto its customers and keep its position as the UK's number two supermarket.

However, at the same time Sainsbury's plans to open the first of nine mega-depots this weekend.

In October, chief executive Peter Davis was forced to issue a statement squashing rumours of a profit warning. Despite this, the new depot is part of a £500m investment by the group to update its supply chain, which is a wider part of its recovery plan issued by Davis two and a half years ago.

The supermarkets have often been accused of using their power to the cost of smaller companies, but analysts say Sainsbury's approach in this instance is less harsh than it could have been.

One commented: 'Sainsbury's had what you might call a 'bang your fist on the table' relationship with suppliers. But they have got themselves out of that and now work more closely with them. Obviously that is a good thing.' Meanwhile, the Prince of Wales - who funds a 1,800 acre organic farm - has spoken to supermarket executives about their treatment of farmers. This followed the announcement that 15,000 UK farming jobs have been lost in the past year.

At a dinner last week, the Prince expressed his anger at the prices farmers receive while the retailers continue to profit. As an attempt to underline this point, the executives' wives were invited so they could hear farmers' complaints of 'bullying' first-hand.