Tesco plots launch of new 'discount' brand to take on Aldi and Lidl

Tesco plots rearguard action to beat Aldi & Lidl at their own game

Tesco is preparing the ground to launch its own line of discount stores as it seeks to tackle budget chains Aldi and Lidl at their own game.

Reports in the Guardian suggest that Tesco has hired advisers from Boston Consulting Group to help it establish a separate brand identity with which to challenge the upstarts head-on.

Such a move would allow Tesco to compete directly on price, arresting a steady erosion of its own customer base as consumers defect to rivals in pursuit of the cheapest possible shopping baskets.

Unlike mainstream Tesco stores, the proposed no-frills outlets would stock a limited number of own brand products, thought to be around 3,000, versus the 25,000 items available in a typical Tesco Extra supermarket.

Tesco is also thought to be mulling the possibility of embracing a Costco-style ‘bulk purchase brand’ in its pursuit of customers seeking rock bottom prices although no decisions have been made so far.

Industry figures compiled by Kantar Worldpanel show that Aldi’s growth in market share is continuing unabated, reaching 6.9% in the 12 weeks to 28 January – up from 6.2% just a year ago. Over the same period Lidl increased its own presence from 4.5 to 5%.

In a consumer satisfaction survey compiled by Which? Aldi claimed top honours, topping the table above competitors such as Marks & Spencer and Lidl.

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