Tesco (LON:TSCO) is set to confirm the launch of its new discount chain next week, The Times has reported. The move will come amid stiff competition in the UK grocery market, where German discounters Aldi and Lidl are pressuring profits at the country’s ‘Big Four’ grocers.
Tesco’s share price has climbed higher in today’s session, having gained 0.25 percent to 237.40p as of 08:55 BST. The advance is largely in line with gains in the broader UK market, with the benchmark FTSE 100 index currently standing 0.15 percent higher at 7,284.75 points.
Tesco closer to launching discount chain
The Times reported today that Tesco was planning to hold a media day next Wednesday in Chatteris, hosted by Dave Lewis, its chief executive. The newspaper notes that following months of speculation, it is widely expected that the former Unilever (LON:ULVR) executive will be announcing the launch of a new discount brand to be called ‘Jack’s’ in a nod to Jack Cohen, the founder of Tesco. It is also believed that the executive leading the initiative is Lawrence Harvey, a former executive of German discount chain Aldi.
The launch of Tesco’s new discount chain will come amid competition from Aldi and Lidl, as well as prospects for a merger between ‘Big Four’ rivals Sainsbury’s (LON:SBRY) and Asda, which could create Britain’s biggest grocer.
Analysts on Tesco
Shore Capital reaffirmed the blue-chip group as a ‘buy’ today, without specifying a price target on the shares, while Barclays continues to see Britain’s biggest grocer as an ‘overweight’ with a valuation of 280p on the stock. According to MarketBeat, Tesco currently has a consensus ‘buy’ rating and an average price target of 250.25p.