Tesco reportedly considering new discount store to rival Aldi and Lidl

Reports over the weekend suggest the supermarket giant has a bold new plan to take on the German discounters.

Love Money
Last updated:12 February 2018 - 01.23pm

Tesco is reportedly planning to launch a chain of discount supermarkets.

According to The Sunday Times, the supermarket giant will match the prices of discounters Aldi and Lidl in an attempt to win back shoppers. 

It is thought that the new brand will run separately from its existing One Stop convenience chain, which has about 900 shops.

The planned new chains will reportedly offer a more limited range of 3,000 products, compared to the 30,000 products stocked in your typical Tesco Extra.

There has been talk of a possible second option involving a "Costco-type bulk purchase brand", similar to a business that the supermarket already has in Thailand.

Tesco declined to comment on the reports.

It is worth noting that the supermarket has considered a move like this before, but it fell through because of fears that it would undermine the main stores. 

Sainsbury’s also tried something similar with Danish discount chain Netto back in 2014 – however, the stores were dropped two years later and eventually sold to Asda.

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Flocking to Aldi & Lidl

The German discounters pose a genuine threat to Britain's established 'big four': Aldi and Lidl now account for £1 out of every £8 spent at UK supermarkets, according to research from Kantar Worldpanel.

What's more, the latest quarterly sales figures show that Aldi and Lidl's sales rose by 16.2% and 16.3% respectively compared to Tesco’s 2.6%, so it's not hard to see why Tesco might be eyeing a bold new strategy to tackle the threat head-on.

Watch this space as we'll be providing more details as we get them.

[Read more: Waitrose to scrap 'confusing' loyalty scheme]