Tesco launches discount chain to rival Aldi and Lidl

UK supermarket Tesco has launched a new discount retail chain called Jack’s, named after its founder Jack Cohen, to encroach on the increasing market share of Lidl and Aldi.

Tesco launched Jack’s yesterday (19 September) under the tag-line “great-tasting food at the lowest possible prices”.

It revealed that 8 out of 10 of the food and drink products stocked in Jack’s will be either grown, reared or made in Britain.

The store will have an own-brand range as well as other grocery brands, and like other discounters, will stock homewares on a “when it’s gone, it’s gone” basis.

The first Jack’s store opened in Chatteris, Cambridgeshire yesterday while another will open in Immingham, Lincolnshire today.

Tesco’s chief executive Dave Lewis revealed that between 10 and 15 stores are planned which will either be new sites, venues next to exiting Tesco stores, or converted former Tesco stores.

Jack’s stores will sell 2,600 products, compared to 35,000 in Tesco, with a total of 1,800 own-branded products.

The new chain promises to be “the cheapest in town” reducing costs by saving money on fixtures and fittings and allowing staff to wear their own clothes rather than a uniform.

Sainsbury’s tried a similar tactic in 2014, opening a number of Netto stores which where subsequently closed two years later.

Dave Lewis, Tesco Group Chief Executive, said: “Jack Cohen championed value for customers and changed the face of British shopping. He’s an inspiration for all of us and that same spirit still drives Tesco now.

“It’s fitting that we mark the beginning of Tesco’s celebration of 100 Years of Great Value by launching a new brand, and stores bearing his name: Jack’s. Great tasting food at the lowest possible prices with 8 out of 10 products grown, reared or made in Britain”.

According to Kantar Worldpanel, in the 12 weeks ending 9 September 2018, Tesco has a 27.4% share of the UK grocery market.

Sainsbury’s, which confirmed its merger with Asda earlier this year, has a 15.4% share of the market, while its Walmart-owned partner has 15.3% share.

Morrisons has a 10.2% share ahead of discounter Aldi with 7.6%. Next is Co-op with 6.6%, then Lidl at 5.5% followed by Waitrose at 5.1%.

Head of retail and consumer insight at Kantar, Fraser Mckevitt, said that just £1 out of every £10 is currently spent at discounters, with UK consumers shopping at ‘the big four’ more frequently.

“There are already over 1,300 Aldi and Lidl stores across the country and the two have a combined market share of 13.1%, so Jack’s is clearly playing a longer-term game,” he added.