TESCO is reportedly planning to launch a chain of cut-price stores to rival budget supermarkets Aldi and Lidl.
The company is understood to be developing a separate brand that would match its German competitors on price with a more limited range than in its main stores.
The Sunday Times claims the supermarket giant is taking measures to counter the growth of the discount stores, whose cut prices are the result of limited products and low running costs.
While the big four supermarkets can have dozens of varieties baked beans or digestive biscuits they will have just one.
This cuts the cost of storage and transportation as well as meaning the retailers don’t need huge superstores with high running costs.
Costs are kept low at every turn, with items often displayed on the pallets they arrived at store in – meaning less staff members are needed.
Even packaging is designed to make staff more efficient. Products will have multiple barcodes so they can scanned quicker.
Tesco declined to comment when contacted by Sun Online.
Data from research group Kantar Worldpanel this week showed sales at Tesco grew by 2.6 per cent in the last 12 weeks but all of Britain’s four biggest supermarkets had lost market share to Aldi and Lidl.
While Tesco has a 28 per cent share of the British grocery market, Aldi’s sales increased by 16.2 per cent and Lidl’s by 16.3 per cent, boosting their respective market shares to 6.9 per cent and five per cent.
Tesco has tightened its hold on the nation’s food market after the competition regulator last month cleared its £3.7billion takeover of wholesaler Booker.
Following an accounting scandal in 2014, Chief Executive Dave Lewis’s strategy to rebuild the supermarket group has been based on increasing food sales.
It comes just weeks after the supermarket giant announced plans to “simplify” the structure of its store teams, putting 1,700 jobs at risk in the process.
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As part of the changes, Tesco revealed its intention to erase people manager and compliance manager roles at its large stores and fulfilment centres.
Customer Experience Managers jobs are also at risk at 226 stores.
Some 1,700 positions will be affected by the changes – but the retailer insisted workers will be supported to find alternative roles “whenever possible” with 900 jobs available within the business.
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