Twsco is hiring staff for a new chain of discount stores called Jack’s as it seeks to face down budget rivals Aldi and Lidl.
It looks set to open between 30 and 60 shops by changing existing stores or reopening closed ones.
The supermarket has now started recruiting for the project – sparking speculation that the first Jack’s could open this autumn.
The chain has listed a series of job adverts with a closing date of August 10. They do not reveal much detail but make it clear that employees would not be working in a normal Tesco supermarket.
The adverts say: ‘The new retail format will be operated separately from the core Tesco business.’
It comes as traditional grocers are squeezed by relentless cost-cutting from the German discounters, forcing them to take drastic action.
Aldi and Lidl’s combined market share has surged from 2.9 per cent to 9.4 per cent in the past decade, putting supermarkets under more pressure than ever before.
A subsidiary of Tesco has sought to register the trademark Jack’s – thought to be a reference to the company’s founder, Jack Cohen.
Tesco will reportedly be trialling Jack’s at sites including in Immingham in Lincolnshire, Chatteris in Cambridgeshire and Wandsworth in south London.
Retail experts were sceptical about the plans, warning that the number of stores involved is too low to make a difference to Tesco’s business. Supermarket chains have tried to launch budget chains before with limited success.
Thomas Brereton, retail analyst at Global Data, said: ‘The possibility of Tesco opening a discount brand in a bid to neutralise the growing threat posed by German discounters Aldi and Lidl looks a bold move. Sainsbury’s attempted a similar concept in 2014 through a partnership with Netto, and its closure two years later came as a result of their failure to expand quickly or sizeably enough.’
Tesco itself tried to launch a budget brand in the 1980s, called Victor Value, but this was ditched when executives decided the label was undermining the main chain.
Bernstein analyst Bruno Monteyne said that Tesco could stock the new chain with its existing Farm Brands range, which is made up of products priced within 2 per cent of what the German firms charge.
The supermarket’s merger with wholesaler Booker last year has also dramatically reduced its costs for stocking some goods, making bargains more sustainable.
It comes as rivals Sainsbury’s and Asda plot a £14 billion merger so they can also compete on price.
Tesco declined to comment on the plans last night.