Tesco is understood to be developing a new discount store in order to take on industry disruptors Aldi and Lidl.
According to The Sunday Times, UK’s biggest retailer is set to launch a separate brand that aims to match the German stores on price as it aims to regain some of the market share it has lost to them in the past decade.
Tesco will reportedly offer a more limited range of products than a standard store, keeping prices as low as possible.
This comes amid an increasingly costly price war in which the country’s largest grocers are attempting to absorb as much of the rising import costs as possible in order to stay competitive.
Aldi and Lidl have made this all the more difficult for the Big 4, offering prices they have struggled to match and slowly chipping away their share of the market.
This was demonstrated in the latest quarterly sales figures across the sector, with Aldi and Lidle seeing sales rise 16.2 and 16.3 per cent respectively compared to Tesco’s 2.6 per cent.
Tesco would not comment on the plans but it is not the first time it has considered the move, having reportedly been pitched under Terry Leahy’s leadership but scrapped due to fears it could undermine Tesco’s main stores.
Industry sources estimate around 3000 would be stocked, around a 10th of a usual Tesco Extra store, and that it would be run separately from its One Stop convenience chain.