HIS nickname was 'The Slasher'. But not because he had appeared in bad Hollywood horror films or a desire to christen the alleyways of Darlington on a Saturday night.

Jacob Edward Cohen was known as The Slasher because of his attitude to the prices of his goods. His motto was: "Pile it high, sell it cheap" - and his maxim has been adopted by the supermarket giant Tesco, the company he founded, for more than 80 years.

Jacob, who was born into a Polish-Jewish immigrant family in the East End of London in 1898, initially opened a stall selling fish paste and golden syrup in 1919. On his first day he took £4 and made a £1 profit.

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He opened more stalls and, in 1924, bought a consignment of tea from TE Stockwell. Re-using part of Stockwell's label from the initials TES, he added his own from his surname - Co. TES-Co was born. Jacob - or Jack as he later became known- went on to see his baby grow up into a giant.

The first Tesco store was opened in Burnt Oak, Edgware, north London, in 1929. By the time the Second World War had broken out, there were 200 stores around north London and, in 1947, Tesco Stores (Holdings) Ltd floated on the Stock Exchange with a share price of 25p.

Staying a step ahead of the competition, Jack got the idea for self-service stores from America and opened the first self-service supermarket in 1956. Over the next three decades, its superstore status was confirmed. Tesco spread across the country, opening petrol stations as well as stores. It expanded in Europe and South Korea.

In the 1990s, it grew its non-food business, opening an on-line book store and on-line banking, closely followed by mobile phones on its shelves and clothing.

Today, it operates in 12 countries outside the UK. There are more than 1,800 Tesco stores in Britain and 260,000 employees. It banks an estimated £1 in every £7 spent on the UK high street and, yesterday, announced profits of £1.09bn in just six months of business. It now has a grocery market share of 31.4 per cent, with Asda its nearest rival coming in at 16.4 per cent and Sainsbury's at 15.9 per cent.

Its catchphrase today is 'Every Little Helps'. But that's not how environmental and consumer groups, and some of its suppliers see it. They believe its rise, and rise, has come at a price to the environment and to the local farmers, who, it says, are forced to supply their goods at rock bottom prices by the "aggressive" chain.

Groups such as Friends of the Earth and the website "Tescopoly" have called on the Government to put a stop to what it calls the "Tesco juggernaut".

To some extent, the pressure has succeeded in that Tesco, and other supermarkets, are currently the subject of an investigation into their dominance by the Competition Commission. The inquiry was launched after the Office of Fair Trading flagged up fears that consumers were losing out because the planning system and tactics of some chains made it harder for rivals to open stores. The findings are expected next year.

Yesterday, Tesco boss Sir Terry Leahy - who has a basic salary of more than £1m - insisted the chain was simply delivering what customers wanted, with price cuts and better ranges leading to its staggering profits. He believes that when a Tesco store opens, businesses around it "do better rather than worse" because people visiting Tesco will stay and visit other shops.

"We have a very positive story to tell on our impact on communities," he says. "It is up to the customers to decide whether we grow or whether we shrink."

But with competition from other supermarkets hot on its wheels, the 'Tesco juggernaught' appears to be going at full speed. There are plans to enter the US market next year, which Malcolm Goodman, a lecturer at Durham University's business school, says will not go down well with retail giants Wal-Mart, owners of Asda in Britain.

"Some people think Tesco are about to take a very dangerous step by trying to have a crack at the US market because that's going to be a bit too close for comfort for Wal-Mart," says Mr Goodman. "Apparently Wal-Mart is eyeing up Tesco and considering using Asda to undermine Tesco in Britain because they don't want them in the US. Wal-Mart has a lot of muscle and it will hit back."

There are signs that, in Darlington at least, store wars have already begun. In a widely unpopular plan, Tesco wants to build a huge supermarket in the town and 130 apartments. In return, the chain has said it will build Darlington Borough Council a new town hall worth £14m.

But in a fresh twist in the fierce debate, Asda has stepped into the arena - or the town hall car park - and laid its plans on the ground, namely to build a supermarket half the size of Tesco's. Asda says it will be big enough to draw people into the town centre but not have an impact on other shops.

It is the impact on small businesses which constitutes a large part of the objections. Many fear they will be driven out by Tesco offering goods at drastically reduced prices, and not only food. Tesco's non-food ranges - it has recently announced its own brand of budget PC software - now accounts for more than one-fifth of UK business.

"They're able to offer the basics of life at heavily reduced prices and sometimes at a loss," says Mr Goodman. "They have this way of moving people through three price bands. There's the bargain band they will offer initially and, when most of the competition has gone, they will offer the mainstream band to shoppers. Then they will move you up to the premium band."

By the time you reach the premium band stage, he says, there are fewer cheaper prices around to act as competition because most of the competition has gone. This comes at the same time as suppliers are being squeezed.

"In a sense, people are captive because basically Tesco will have a monopoly," he says. "That's when they start putting more and more of their own brands on the shelves."

But the next move by Tesco, says Mr Goodman, will be to attract people to their stores via the petrol pumps, sparking a possible fuel war. The idea is that if Tesco attracts people to their forecourts, by slashing prices, motorists may shop at their stores too, which, he says, will have a detrimental effect on other petrol forecourts.

Tactics to attract customers have, of course, always been used by supermarkets, but environmentalists and consumer groups believe Tesco is bent on world domination. Some believe, however, that the huge monopoly it has in the market could eventually prove its downfall.

"I've heard it said that we don't have to worry about Osama bin Laden but you do have to worry about Tesco taking over the world," says Mr Goodman.

"But perhaps they are being too aggressive and they could well be getting themselves too unpopular with the public. This may actually check their growth. It could well be that the halcyon days are over."