Britain’s biggest retailer Tesco (TSCO) is considering a separate discount brand that would match rivals Aldi and Lidl on price and sport a more limited range than its main stores at a time when UK shoppers are finding life tough. That’s according to an article in The Sunday Times.

The BRC-KPMG Retail Sales Monitor showed like-for-like UK retail sales creeping 0.6% higher in January. Food sales exceeded non-food.

UK inflation staying at 3% reinforces concerns that the Bank of England will hike interest rates, putting further pressure on consumer spending.

Shore Capital analyst Clive Black says he was surprised by the Tesco story, not least because the company has been trying to simplify its business, cut its range and declutter stores.

Dave Lewis-led Tesco, whose £3.7bn acquisition of wholesaler Booker (BOK) was cleared by the CMA last month, grew sales by 2.6% in the 12 weeks ending 28 January, according to the latest grocery market share figures (6 Feb) from Kantar Worldpanel.

However, all of the big four supermarkets lost market share to Aldi and Lidl, whose sales shot up by 16.2% and 16.3% respectively. (JC)

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