Tesco has reportedly asked suppliers to agree price cuts as it steps up its battle with budget supermarkets, according to the BBC.
Tesco launched its “Aldi price match” promise in March, where products including fresh and freezer food are matched against those offered at the budget supermarket.
The supermarket announced in June that it has extended the scheme to nearly 500 Tesco and branded products in response to increasing competition.
Several suppliers told The Grocer that they faced pressure from the supermarket to lower their prices.
Some raised concerns over the timescale of the demands, as well as a lack of clarity over how the change in promotions would work in practice.
Neil Shah, director of research at Edison Group, said that investors “should keep a close eye on the company, since the group operates in a crowded market with retailers Aldi and Lidl continuing to gain market share and current results might not be replicated when the UK is lifted from lockdown.”