Tesco is set to trial a discount store format as its obsession with the discounters continues, The Grocer can exclusively reveal.
A source close to the retailer claimed it was working on a discount store format of about 15,000 sq ft. The concept was designed to challenge the growth of discounters Aldi, Lidl and Netto, he said.
The new format store will be trialled at a location in Scotland.
If successful, Tesco planned to roll it out across the whole of the UK.
Sir Terry Leahy told The Grocer last October: "Aldi and Lidl don't like competing with Tesco. We know that from ex-employees we've recruited."
It's understood Tesco chose Scotland for the location of the trial because of its demographic, and the relatively low competition, the source added.
The new format stores were expected to focus primarily on own-label and discounter brands.
In January, Tesco, which already claims to be Britain's biggest discounter, increased the number of products in its Discounter and Market Value ranges by 200.
However, these two ranges accounted for just 2.3% of total Tesco sales in the 8w/e 22 February, according to TNS Worldpanel.
Scotland was demographically well placed for discount retailers, said professor of retail studies at the University of Stirling, Leigh Sparks.
A significant part of the country's population was centred around the big four cities and this high urban density made distribution easier.
"Some of the operating elements are possibly easier up here," he said.
The discounters grew sales by 10.8% year-on-year in Scotland in the 12 weeks ending 22 March, according to TNS, outperforming the 4% growth of the big four.
However, a Tesco spokesman said the new format was not going to be pitched as a discounter. "They are not called anything different," he said. "We're not competing with anyone in particular. We've always said we'd judge each location on its merits."
Tesco had already opened smaller stores in Durham Maltby and Kesgrave, which consumers might have thought were too small for a supermarket. It had also recently announced plans to acquire a selection of Woolworths sites, he added.
Tesco was flexible and was always considering different sizes within existing formats, he added.
Aldi and Lidl both have a strong presence north of the border with depots in West Lothian.
Aldi opened a £20m distribution facility in Bathgate just over four years ago, and Lidl also has one in Livingston.
German discounter Aldi has 42 stores in Scotland and plans to open another in Glasgow in May.
Aldi's first Edinburgh store will open in the summer. Netto does not have stores in Scotland, and has no plans to open any, said a spokeswoman for the Danish retailer.
A source close to the retailer claimed it was working on a discount store format of about 15,000 sq ft. The concept was designed to challenge the growth of discounters Aldi, Lidl and Netto, he said.
The new format store will be trialled at a location in Scotland.
If successful, Tesco planned to roll it out across the whole of the UK.
Sir Terry Leahy told The Grocer last October: "Aldi and Lidl don't like competing with Tesco. We know that from ex-employees we've recruited."
It's understood Tesco chose Scotland for the location of the trial because of its demographic, and the relatively low competition, the source added.
The new format stores were expected to focus primarily on own-label and discounter brands.
In January, Tesco, which already claims to be Britain's biggest discounter, increased the number of products in its Discounter and Market Value ranges by 200.
However, these two ranges accounted for just 2.3% of total Tesco sales in the 8w/e 22 February, according to TNS Worldpanel.
Scotland was demographically well placed for discount retailers, said professor of retail studies at the University of Stirling, Leigh Sparks.
A significant part of the country's population was centred around the big four cities and this high urban density made distribution easier.
"Some of the operating elements are possibly easier up here," he said.
The discounters grew sales by 10.8% year-on-year in Scotland in the 12 weeks ending 22 March, according to TNS, outperforming the 4% growth of the big four.
However, a Tesco spokesman said the new format was not going to be pitched as a discounter. "They are not called anything different," he said. "We're not competing with anyone in particular. We've always said we'd judge each location on its merits."
Tesco had already opened smaller stores in Durham Maltby and Kesgrave, which consumers might have thought were too small for a supermarket. It had also recently announced plans to acquire a selection of Woolworths sites, he added.
Tesco was flexible and was always considering different sizes within existing formats, he added.
Aldi and Lidl both have a strong presence north of the border with depots in West Lothian.
Aldi opened a £20m distribution facility in Bathgate just over four years ago, and Lidl also has one in Livingston.
German discounter Aldi has 42 stores in Scotland and plans to open another in Glasgow in May.
Aldi's first Edinburgh store will open in the summer. Netto does not have stores in Scotland, and has no plans to open any, said a spokeswoman for the Danish retailer.
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