Britain’s Tesco takes on discount rivals with new Jack’s chain

A customer passes a branch of the Tesco Express convenience store in central London December 2013

Image Tesco has been closing poorly-performing convenience stores and could place some under the new brand

Chatteris is one of two towns where Tesco will open new Jack's stores tomorrow, with more to come over the coming months. Eight in 10 products on the shelves are grown, reared or made in the UK.

Jack's will also offer a range of limited-run general merchandise on a "when it's gone, it's gone" basis, similar to the special offer aisles found in the German discounters.

Although Tesco is Britain's biggest chain with a 27.4 percent share, according to the latest industry data, it could be overtaken by Sainsbury's proposed 7.3 billion pound ($9.6 billion) takeover of Asda.

Tesco plans to open another 15 branches over the next year, five of which will be converted from existing Tesco stores.

"We leverage the size and expertise that's available to Tesco and Tesco partners and we bring that capability to Jack's in an operating model that is lower and we pass that benefit on to our customers", Mr Lewis said on Wednesday.

Scores of jobs have been created in Chatteris as Tesco opens its first Jack's discount store.


The new supermarket is named after Jack Cohen, who founded Tesco in 1919, and the launch of the new chain forms part of Tesco's centenary celebrations.

The emphasis on the discount could also increase the pressure on the profit margins of Tesco, at a time when the group is on track to achieve the recovery engaged since 2016 by its ceo Dave Lewis, after years of lean cows and a scandal book.

Tesco has also revealed Jack's will operate on a low-priced business model, with a "no fuss" approach, simplified range of products, "no fancy fixtures or fittings" and no added extras.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said earlier this year: "Traditionally focused on own-label lines, Lidl has actually seen fastest growth among its branded products, which are up by 28% and now account for 12% of all sales".

"It goes without saying, but Tesco will have to find a way to attract customers from the likes of Aldi, Lidl and Iceland, rather than convert existing Tesco customers into discount shoppers through brand association".

'He's an inspiration for all of us and that same spirit still drives Tesco now. "Almost half of shoppers try to buy local produce when they can so it could be a savvy move, though it's still very early days".

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