But analysts are split over how much of a long-term battle the traditional supermarkets can put up against the low-cost segment.
Sounding a more bullish note, Bruno Monteyne, European food retail analyst at Bernstein, described a trend of customers once lost to Aldi and Lidl heading back to Tesco.
"That's a major dynamic we haven't seen for years," he said.
"It shows the supermarkets have improved their offer, not just price but service and different ranges. It won't replace Aldi and Lidl but it's a valid alternative if you want broader ranges."
However, Philip Benton, senior research analyst at Euromonitor International, warned that the U.K.'s impending exit from the EU could disproportionally benefit the likes of Aldi and Lidl in the aggressive price wars.
"Brexit will be better for the discounters because of their lean supply chain," Benton said.
Tesco's prices have fallen 6 percent in the past two years and CEO David Lewis told reporters on Wednesday that he sees no let up in food price deflation, particularly in the short-term. In such an environment, the ability to manage supply costs becomes an even more critical lever with which to preserve margins.
"There will be tougher battles ahead with the discounters," Euromonitor International's Benton cautioned Tesco and its ilk.
While acknowledging this, Himanshu Pal, vice president at Kantar Retail, said that with both a defensive and offensive strategy, Tesco can put up a decent fight.
"Tesco will need to keep reinventing its price and quality value proposition," he said, stressing that discounters carry far fewer individual products than Tesco. As such, Tesco can "afford to price defend (match) without burning a massive hole in its pocket."
Furthermore, Tesco has other tricks up its sleeve, according to Pal.
"Shopper experience, digital immersion and analytics are some of the areas where discounters have traditionally struggled. This is where a multi-channel retailer such as Tesco can truly innovate and drive differentiation versus the discounters," he said.