Wal-Mart is reportedly set to launch a counter-attack to Tesco's move into the US with its own plans to open smaller grocery stores.

The US retail giant is planning to go to head-to-head with Tesco's Fresh & Easy stores in Arizona, the Financial Times said today (14 January).

Wal-Mart is said to have secured leases for four 20,000 sq ft outlets near Phoenix, in and around where Tesco is setting up its own stores.

The plans for the so-called Marketside stores are Wal-Mart's first new concept in the US for ten years, the FT said.

Officials at Wal-Mart failed to return a request for comment as just-food went to press.