EasyJet founder Sir Stelios Haji-Ioannou is launching a low-cost food retail business to undercut budget supermarkets Aldi and Lidl.

The entrepreneur yesterday announced plans for a pilot site in Croydon as his easyGroup company aims to cash in on the very cheapest end of the grocery market. The venture could, if successful, be rolled out on a wider scale next year.

Sir Stelios said he became aware of an opportunity amid publicity about the widespread use of food banks.

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He said: "I have a feeling that there is a gap in the food retail market - a niche below some of the current budget operators such as Aldi and Lidl.

"Concentrating on affordable, basic 'no-brand-name' packet and tinned foods at bargain prices, easyFoodstore underlines the need for additional reliable day-to-day provision of basic foodstuffs. No other details have yet been decided."

Sir Stelios said that the business could be expanded next year by taking advantage of weak property prices to buy up more freehold retail sites.