Retail

Tesco Said To Be Planning New Discount Chain

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UK supermarket giant Tesco is reportedly planning to create a new discount grocery chain format, in a bid to compete with Lidl and Aldi.

According to The Sunday Times, Tesco is working with Boston Consulting Group to help create a new brand 'that would match or beat the German discounters' on price.

The retailer is also said to have asked some of its private-label suppliers to sign non-disclosure agreements before contributing to the project, which would offer a more limited range of products than the average Tesco store.

Tesco has not commented on these reports.

Growing Competition

The latest market share figures from Kantar Worldpanel show that Tesco remains the largest grocer in the UK, with 27.8% share, however, the German discounters are its fastest-growing rivals.

In the most recent quarter, Lidl and Aldi posted sales growth of 16.5% and 16.2%, respectively, gaining a combined market share of 11.9%.

Tesco has been restructuring operations in recent years under CEO Dave Lewis, in an effort to deal with the threat of increasing competition.

The retailer's takeover of Booker Group, which aims to create “the UK's leading food business”, is set to be completed in the coming weeks, following months of investigation from the Competition and Markets Authority.

Last week, Tesco announced that Booker chief executive Charles Wilson has been appointed as head of the group's UK and Ireland supermarket business, and will commence the role once the wholesaler's merger with Tesco is complete.

The retailer said that it expects the deal to be finalised on 5 March.

© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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