Tesco is trialling a discount format as it seeks new ways to fight back against the rise of hard discounters Aldi and Lidl, it has emerged.

Tesco is trialling lower prices and limited ranges in some of its One Stop convenience stores, according to the Sunday Times. The trial is running at three stores – Solihull, Burntwood and Manchester – and has been underway for two months.

Tesco has owned the One Stop chain since 2003. Its stores are convenience sized and it is run by its own management team.

The trial is thought to be the brain child of One Stop chief executive Tony Reed.

Tesco has suffered a torrid year with the discounters Aldi and Lidl playing a significant part in its dwindling sales. The grocer has also reported four profit warnings, changed its chief executive, and was embroiled in a £263m accounting scandal.

New boss Dave Lewis is due to reveal his new strategy on January 8. It is understood he has had no involvement with the One Stop trial.

Tesco also faces a pension black hole of up to £3bn, and some analysts expect Lewis to sell off parts of the business to fund a new strategy.

It also emerged recently that former chief executive Philip Clarke had sold off £1.4m of shares.