Dunnes Stores, the largest Irish-owned supermarket, is for the first time seeking to offer online retailing through a new service known as Dunnes Direct, putting it in direct competition with former Dunnes managing director Ben Dunne, who will shortly offer cut price products through his bendunnedirect.com website.

Ben Dunne disclosed in early March a plan to sell cut price clothing, gifts, jewellery, toys and household items at rates far below those available in Irish high street stores. Drawing on his inside knowledge Dunne said he would target the areas with high profit margins like men's suits.

But it has now emerged that in the days that followed Dunne's comment s Dunnes Stores itself lodged an application for a service called Dunnes Direct with plans to sell a whole range of goods from food to soaps to cleaning products.

A large range of web domain addresses have also been registered. Asked last week whether the Dunnes Direct service was effectively a method to stymie Ben Dunne's venture, the company declined to comment.

The company has lodged a trademark application for the Dunnes Direct service and some similar applications have been lodged in Spain, where the company operates. Meanwhile in recent days Dunnes Stores has begun rolling out its St Bernard grocery brand for the first time in five years.

The brand, which has been used by Dunnes for 52 years, had largely been removed from stores in 2003 as part of a move upmarket but last week the supermarket giant began showing St Bernard goods in prime areas of their supermarkets, especially in the frozen goods sections, in order to highlight their price competitiveness.