Is Tesco taking on the discounters?
Tesco is rumoured to be in the process of developing a new discount store brand to compete with stores like Aldi and Lidl, as their own market share continues to grow.
16 February 2018
Tesco is working on a secret plan to develop a new discount grocery chain to compete with the likes of Aldi and Lidl, The Guardian has reported.
The company – the UK’s number one supermarket by market share – has enlisted a consulting group to help develop the new store, which would offer a limited range of products. A Tesco store would feature a vastly reduced product range, according to the report. A regular Tesco store might stock around 25,000 items, whereas the new format might feature as few as 3,000.
The move – which has not been confirmed by Tesco save than a prior comment that it was developing “new formats to better serve customers” – should come as a boost to the already climbing reputations of discount stores like Lidl and Aldi. While they are lagging far behind the big players in terms of market share, the fact that Tesco is moving to bring the fight to them, it’s a sign of the long-term challenge they pose.
Aldi is the UK’s fifth-largest grocery retailer, with 6.9% market share in the 12 weeks to January 28 – an increase of 0.5% year-on-year. Lidl, meanwhile, carries 5% of the market.