Tesco is rolling out a new 'pound shop' strategy that involves both food and non-food to its larger stores.

The retailer has dedicated an aisle to the lines, which are being sold at multi price points of 50p, 75p, £1, £2 and £3 and are displayed beneath large '£ Shop' displays.

The range includes brooms, chocolate bars, mats, coasters, balloons, greeting cards, CDs and DVDs and the dedicated aisles are located near store entrances.

Some lines are also sold in other areas of the stores and are not new to Tesco. A spokesman declined to comment on the details but said that the range was "flying off the shelves".

Tesco has increased the number of featured-space pound promotions by 325% to 1,622 in the past year. Asda, which last month declared itself "Britain's biggest poundshop", now has 2,925 compared with 1,535 last year, according to data from the consultancy Assosia. An Asda spokeswoman said it was no surprise rival supermarkets wanted to follow its lead.

"Asda has more than 7,000 lines at £1 or less across a broad range of products, all of which are extremely popular with customers," she said.

"We price at a round pound because it makes shopping on a budget easier for customers. They can add up quickly as they go round the store."

Yet single-price retailer rivals argued that in using more than one price point under the name '£ Shop', Tesco was confusing consumers.

"Poundland offers all its products for a pound and while consumers love single price points, they work best in an environment where everything's the same price," said Poundland chief executive Jim McCarthy.

"When you walk into a 99p Store, everything is a maximum of 99p," said 99p Stores' buying chief Faisal Lalani. "A multi-price environment with a pound section doesn't work so well."