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Reuters reports this morning that UK-based Tesco "will start price matching Aldi on hundreds of everyday items, firing the latest salvo in its fight to stem the market share gains of its rival."

The price-matching policy will apply to both stores and e-commerce.

According to Reuters, "The UK industry leader still has a 27.2% share of the market, but it has been chipped away by Aldi and rival discounter Lidl, who have been aggressively opening new stores and now have a combined 13.7% - more than treble the level of a decade ago."

While Tesco has tried a number of tactics to combat the discounters - last year it launched a subscription-based loyalty program - "Thursday’s initiative is the first time Tesco has directly price-matched Aldi," the story says.

KC's View:

The question is, does Tesco benefit most from matching Aldi and Lidl, or from creating a clear and compelling differentiated alternative?  At some point, does Tesco dilute its brand equity and value proposition by taking this approach?

Just asking.