Retailer Tesco is considering the creation of a new cut-price brand that aims to rival rising competition from Lidl and Aldi.
The retailer is the largest in the United Kingdom. It is reportedly proposing a separate chain of stores which would counter its fast-expanding German competitors.
Industry sources informed The Sunday Times that the supermarket would produce a brand that has a smaller range of products, imitating the restricted ranges that are featured by Lidl and Aldi which enables the retailers to offer low prices.
The Big Four supermarkets, which is comprised by Sainsbury’s, Tesco, Morrisons, and Asda have all been opposing Lidl and Aldi in an attempt to maintain their market share.
Earlier in February, Tesco informed shareholders that new innovative formats would be a part of its future planning after its £3.7bn takeover of Booker Group.
The group stated: “By joining forces, the combined group will have enhanced capabilities and will benefit from the learnings and experience of both businesses as it seeks to develop new formats to better serve customers.”
Tesco also revealed that Charles Wilson, the chief executive of Booker, will become the boss of its operations in the United Kingdom once the two companies have completed their merger.
The suggested move arrives at a time of transformation for the group. Tesco has announced that is it is cutting around 800 jobs in addition to the Booker merger.