Tesco has launched a new discount store chain named Jack’s – launching as competition to German discount stores Aldi and Lidl.
The chain, which is Britain’s biggest retailer, has opened its first two Jack’s stores in Chatteris, Cambridgeshire, and Immingham, North East Lincolnshire.
Reports state that there will be up to 15 stores opening over the next year, with most products being Jack’s own brand with the chain having 2,600 lines.
Chief executive Dave Lewis said in a statement: “(Tesco founder) Jack Cohen championed value for customers and changed the face of British shopping.
“It’s fitting that today, 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.”
This news comes after reports that Lidl and Aldi have experienced successful trading recently with Tesco, Asda, Sainsbury’s and Morrisons taking a hit because of the discounts on offer by both brands.
Tesco is Britain’s grocery market leader with a share of 27.4%, while Aldi and Lidl have increased their combined share to 13.1%, according to the Kantar Worldpanel data.
However, that position for Tesco’s could be under threat with the proposed merger between Asda and Sainsbury’s, which was agreed earlier this year.
Analysis: Dr Gordon Fletcher at University of Salford
With its emphasis on a UK product base, Tesco has finally launched a response to the high street threat of European retailers Aldi and Lidl.
The new Jack’s brand – a reference to Tesco founder Sir Jack Cohen and a nod to the company’s 100-year history – will begin appearing next week in repurposed and existing Tesco properties. Jack’s will also be based around a UK-based own-brand approach.
The challenge for Tesco will be to continuously compete at an unfamiliar price point on common household products. Aldi and Lidl both successfully compete in the retail sector by using a consistent layout in custom-built stores with a supply chain that sources items from suppliers across Europe.
Jack’s will need to work hard to dent the success of Aldi and Lidl, and will also need to prove its value against the wider Tesco offering including its existing chain of One Stop convenience stores.