British supermarket chain Tesco has opened budget sections in a part of its stores, filled with the cheapest products in a move to better compete with discount chains.
The budget sections can currently be found in some 60 stores, but if they are deemed successful, Tesco wants to expand it to 300 stores. Consumer can get washing products, animal food and detergent in these sections, that will be designed in their own style for better visibility.
Tesco's attempt to compete with discounters like Poundland and Poundworld, two chains that have grown considerably in Great Britain these past few years. Both have already taken over quite a bit of market share from the traditional supermarket chains.
Market share slipping
Analysts do not believe Tesco will attract bargain hunters by adding a few aisles of cheap products: "Tesco had to do something about the likes of Poundland but I think shoppers would rather find deals through the normal course of their shop than go down a couple of separate aisles", Grocery Insight's Steve Dresser said.
Tesco is currently still Great Britain's largest chain with a 28.6 % market share, but it still had 29.7 % only a year ago. Aldi's market share grew from 3.4 to 4.6 % in the same time frame and Lidl has a 3.4 % market share.