Tesco to take on discount supermarkets with Jack’s stores

TescoBritish supermarket operator Tesco is set to unveil a new network of Jack’s stores: a budget grocery concept it hopes will take the fight directly to German discounters Aldi and Lidl.

While the company has not made an official announcement, European news sources are reporting details leaked from multiple sources.

In the first phase of a roll-out program, Tesco plans to open 60 Jack’s stores, initially in main cities. A Liverpool outlet will reportedly open its doors within five weeks and staff are being recruited for at least another three stores, suggesting an opening is imminent.

The Guardian revealed the chain will be called Jack’s and advertisements for staff refer to small teams in a new company that is operationally independent of Tesco.

Analysts suggest Tesco will be able to use its recently acquired wholesaler Booker to help supply stores and Jack’s limited range and compact footprint would differentiate it from full-service Tesco stores with large product ranges and Booker’s cash-and-carry model which primarily targets business and the foodservice sector, selling in bulk.

Some media have quoted inside sources saying the designs of Jack’s stores show “striking similarities” with Belgian chain Colruyt.

Tesco trialled a discount format called Victor Value in the 1908s, but scrapped the concept after four years, fearing it would cannibalise sales of its main network. But in today’s UK grocery market with Aldi and Lidl already accounting for 13 per cent of the British grocery market and achieving year-on-year sales growth around 8 per cent, cannibalisation is less of a concern than losing sales to rival chains.

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