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Tesco is thought to be about to open a new style of discount store in North east Lincolnshire, the first in a new trial of new budget shops to take on the likes of Aldi and Lidl.

The company is believed to have earmarked a dormant store in Immingham for the new project, a move welcomed by the town’s mayor.

The 4,274sqm Tesco food store was completed off Washdyke Lane, Immingham in 2014. An Aldi currently occupies an adjacent site.

But just days before it was due to open creating 200 new jobs, Tesco announced it was pulling the plug due to a financial downturn.

(Image: Grimsby Telegraph)

Since then the building was mothballed and has remained empty.

Talks were started to split the large building in two and plans by Home Bargains to occupy half of the site were proposed.

Now Tesco are seeking to launch a new style of discount grocery store to challenge neighbouring Aldi, also on Washdyke Lane, Immingham and Lidl.

The Times newspaper reported Tesco was about to open the store as a guinea pig as a trial to see how it could compete with low cost rivals.

According to The Times, Tesco has tasked retail director Lawrence Harvey – who they recruited from Aldi two years ago – to spearhead its assault on the discount market. The first two stores involved are Immingham and Chatteris in Cambridgeshire.

What is the idea behind Tesco's new budget stores? The cheap-and-cheerful methods employed by German stores Lidl and Aldi are what is driving Tesco’s new budget-style supermarkets. Tactics include keeping a reduced amount of stock, displaying goods on pallets, and multiple barcodes so customers can get through checkouts faster. The sales tactics pioneered by Aldi and Lidl cut costs for storage, transport and staff, meaning lower prices for customers. Tesco has a 28 per cent share in the UK grocery market compared to Aldi's 6.9 per cent and Lidl's 5 per cent but the low cost brands are continuing to grow in popularity. Aldi recently knocked Waitrose off the top spot in an annual supermarket satisfaction survey.

Immingham mayor Stewart Swinburn said the new store would give shoppers more choice in the town and create jobs.

“It is about time they did something with the building,” said Councillor Swinburn.

“It is good if they are opening the Immingham branch. Even if just half of it gets used,” he said.

(Image: Grimsby Telegraph)

Home Bargains could open the other half in April, he said.

A spokeswoman for Tesco declined to comment.