Wal-Mart is planning to prepare and serve fresh food at delicatessen counters in its new Marketside convenience stores, in a bit to compete with Tesco's Fresh & Easy offering.

The smaller-format stores will include a kitchen, food counters and seating for up to nine people, the FT said, citing planning documents.

The Marketside neighborhood stores will be 15,000 square feet and dedicated to helping our customers answer the question 'What's for dinner?'. The size will be less than a tenth of the size of most of the world's largest retailer's superstores.

Wal-Mart's British supermarket rival Tesco entered the U.S marketplace in November last year, opening Fresh & Easy Neighborhood Markets stores in California, Arizona and Nevada. Tesco has endeavored to attract U.S. shoppers with smaller convenience stores that emphasize ready-to-eat meals and fresh produce.

Job adverts for the stores have already appeared, informing would-be staff that Marketside will be the neighborhood market for busy people with a taste for fresh and delicious food.

Tesco has opened more than 60 Fresh & Easy neighborhood stores around Phoenix, Los Angeles and Las Vegas, and plans to open another 200 by the end of 2009.