Tesco is said to be developing more premium products to attract shoppers away from Waitrose and Sainsbury's.
Customer research has consistently shown that it remains behind its rivals in the queue of affluent consumers, particularly in south-east England.
In an attempt to adapt to customers’ changing attitudes, it is thought that Tesco is working on expanding its Finest premium range which already contains 2,000 products.
Chief executive Sir Terry Leahy said: “The long-term trend of declining spend on food [as a proportion of income] has stopped and we are seeing a significant and fundamental shift in priorities.”
The supermarket giant, which posted record annual profits of £2.5bn this week, announced plans to open another 2.1m sq ft of trading space in the UK this year, more than a third of which will come from store extensions.
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