Tesco bargain range squeezes discounters

Tesco is seeking to squeeze low-cost retailers such as Poundland and Instore, by stocking a range of bargain items in its Extra stores.

The UK’s number one grocer is rolling out aisle-end displays featuring products such as car care and home care. Items include haberdashery and bathroom wares, some of which are priced at 99p. Discounted CDs, books and DVDs are also on sale.

Tesco would not comment on its decision to stock the bargain lines separately in-store. But one City analyst says: “This is likely to be an attempt to cover all areas of the market.

Tesco is already number one and intends to boost its offering in any way it can, to create the quintessential one-stop shopping experience.”

The move comes at a time when Instore, formerly known as Poundstretcher, has issued a profit warning following flat like-for-like sales in the four weeks to February 11.

Meanwhile, Tesco is also gearing up to broaden its premium food range in response to the impending arrival of US organic food specialist Whole Foods Market in this country (MW January 26). It is not known whether the broadening of Tesco’s premium offer will be rolled out under the Finest umbrella, or actually branded separately.

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