Tesco is set to launch its own-branded smartphone later this year, following the success of the Hudl tablet, of which the retail giant claims to have shifted more than 550,000 since the device went on sale late last year.

CEO Philip Clarke confirmed the smartphone plans in an interview with BBC Radio 5 live, and also revealed that the Hudl 2 tablet would make its debut in September following the success of the original.

The BBC understands that while Tesco’s Hudl was a relatively low-spec device that competed with cheaper tablets, the Tesco smartphone will have a feature set similar to the Samsung Galaxy S5 but will be aggressively priced.

It is not clear whether it would be available on all operators or just on Tesco Mobile, but Clarke said the device will come pre-loaded with Tesco digital services, such as the Blinkbox music, movie and book service, grocery shopping apps and the Tesco banking services, including the current account, which is due to go live later this year.

“The opportunity in multi-channel retailing is what’s led to us to develop the Hudl tablet,” said Clarke, adding that the smartphone would be available later this year.

Tesco has struggled recently due to increased competition from discount supermarkets at the low-end of the market and from high-brow rivals at the top, and the company has sought to diversify by investing in entertainment and online services.