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Tesco opens discount store Jack's to take on Lidl and Aldi Tesco opens discount store Jack's to take on Lidl and Aldi
(about 2 hours later)
Tesco is stepping up its fightback against Aldi and Lidl with the launch of its own cut-price chain, Jack’s. Tesco is intensifying its fightback against Aldi and Lidl with the launch of its own cut-price chain, Jack’s.
The first store has been unveiled by the Tesco chief executive, Dave Lewis, in the small Cambridgeshire town of Chatteris. The public will get their first chance to shop at Jack’s on Thursday morning when the store opens, along with a second outlet in Immingham, Lincolnshire. The first store has been unveiled by the Tesco chief executive, Dave Lewis, in the small Cambridgeshire town of Chatteris. Shoppers will get their first chance to visit Jack’s on Thursday morning when the store opens, along with a second outlet in Immingham, Lincolnshire.
The new chain is named after Jack Cohen, who founded Tesco 99 years ago, earning the nickname “Slasher Jack” for his “pile-it-high, sell-it-cheap” approach to retailing. The chain is named after Jack Cohen, who founded Tesco 99 years ago. He was nicknamed “Slasher Jack” for his “pile it high, sell it cheap” approach to retailing.
Lewis said the group planned to open 10 to 15 Jack’s stores over the next six months, about half of which will be converted Tesco outlets while others will be next to existing Tesco stores and some on new sites. Lewis said the group planned to open 10-15 Jack’s stores over the next six months, about half of which will be converted Tesco outlets, while others will be next to existing Tesco stores and some on new sites.
Jack’s is a bid to take on Aldi and Lidl, two German discounters that have shaken up the UK grocery trade, nearly doubling their market share to 13.1% in the last five years. Their growth continues to far outpace that of traditional supermarkets. Aldi and Lidl, two German discounters that have shaken up the UK grocery trade, nearly doubling their market share to 13.1% in the last five years. Their growth continues to far outpace that of traditional supermarkets. Tesco, which accounts for £27.40 out of every £100 spent in UK supermarkets, compared with nearly £32 at its peak, has hired the former Aldi executive Lawrence Harvey to run Jack’s.
Lewis 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.Lewis 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 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. Great tasting food at the lowest possible prices with eight out of 10 products grown, reared or made in Britain.” “It’s fitting that today, we mark the beginning of Tesco’s celebration of 100 years of great value by launching a new brand, with stores bearing his name: Jack’s. Great tasting food at the lowest possible prices with eight out of 10 products grown, reared or made in Britain.”
Tesco, Sainsbury’s, Asda and Morrisons have all been forced to slash costs and close unprofitable stores to fund price cuts on everyday essentials where competition from discounters is heaviest. Tesco, Sainsbury’s, Asda and Morrisons have slashed costs and closed unprofitable stores to fund price cuts on everyday essentials where competition from discounters is heaviest.
Tesco has also launched an array of cut-price goods under in-house brands such as Creamfields, Butcher’s Choice and The Growers Harvest, but 1,800 of Jack’s 2,600 products – compared with more than 20,000 in a typical Tesco store – are a new own-label bearing the new chain’s name. Jack’s stores will have fewer staff than a Tesco of the same size. Workers will earn more in basic pay per hour than Tesco staff – £9 per hour compared with £8.18 at present and £8.42 from November at the main supermarket and £8.85 at Aldi. However, Jack’s workers will not get a staff discount or an annual bonus, unlike Tesco employees.
Products will include familiar grocery brands as well as an aisle of general merchandise on a “when it’s gone, it’s gone” basis, something familiar to Lidl and Aldi shoppers. Workers at five Tesco Metro stores being converted to Jack’s – in St Helen’s and Edge Hill in Merseyside, Rubery and Castle Bromwich in the West Midlands and Middlewich in Cheshire – were offered redeployment to a Tesco store or redundancy as an alternative to switching to the new pay deal.
About 1,800 of Jack’s range of 2,600 products are own-label items. A large Tesco stores stocks more than 25,000 products.
Products will include some big name grocery brands including Nestlé and Cadbury as well as an aisle of homewares on a “when it’s gone, it’s gone” basis, something familiar to Lidl and Aldi shoppers.
Tesco: 27.4Tesco: 27.4
Sainsbury’s: 15.4Sainsbury’s: 15.4
Asda: 15.3Asda: 15.3
Morrisons: 10.2Morrisons: 10.2
Aldi: 7.6Aldi: 7.6
Co-op: 6.6Co-op: 6.6
Lidl: 5.5Lidl: 5.5
Waitrose: 5.1Waitrose: 5.1
Iceland: 2.1Iceland: 2.1
Ocado: 1.2Ocado: 1.2
Others: 3.5Market share (% in the 12 weeks to 9 September 2018)Others: 3.5Market share (% in the 12 weeks to 9 September 2018)
As much as 80% of the products will be grown, reared or made in the UK and the store’s focus on British products and Tesco’s long heritage are all well flagged in store in an attempt to differentiate it from Aldi and Lidl. Approximately 80% of the products will be grown, reared or made in the UK, and the store’s focus on British products and Tesco’s long heritage are all well flagged in store to differentiate it from Aldi and Lidl, which stock hundreds of lesser-known European brands.
Tesco has also marshalled its technology skills to give a new spin to discount retailing. Shoppers will be able to scan and pay for their shopping using a mobile app as an alternative to its traditional checkouts and self-service tills. Tesco has also marshalled its technology skills to give a new spin to discount retailing. Shoppers will be able to scan and pay for their shopping using a mobile app.
The new format opens in a Tesco “ghost store” that has been empty since 2014 when the retailer halted expansion plans after a dive in profits and an accounting scandal. The new format will open in a Tesco “ghost store” that has been empty since 2014, when the retailer dropped expansion plans after a fall in profits and an accounting scandal.
Until Wednesday, Jack’s had been kept heavily under wraps, with staff and visitors asked to sign confidentiality agreements and the windows covered with plastic boards. Until Wednesday, Jack’s had been kept under wraps, with staff and visitors asked to sign confidentiality agreements and the windows covered with plastic boards.
Most of the new Jack’s outlets will be converted from Tesco Metro stores in locations such as St Helens, on Merseyside, and Rubery in Worcestershire. Most of the new outlets will be converted from Tesco Metro stores in locations such as St Helens, on Merseyside, and Rubery in Worcestershire.
Tesco will be hoping Jack’s has more staying power than the discount chains tested by its mainstream rivals. Sainsbury’s opened a string of Netto stores with the Danish chain’s parent group in 2014, only to shut them two years later after struggling to make a profit. Asda’s 2006 experiment with the Asda Essentials chain also swiftly closed. Tesco will be hoping Jack’s has more staying power than the discount chains tested by its mainstream rivals. Sainsbury’s opened a string of Netto stores with the Danish chain’s parent group in 2014, only to shut them two years later after struggling to make a profit. Asda’s 2006 experiment with the Asda Essentials chain also closed swiftly.
Increased competition has prompted Sainsbury’s and Asda, the UK’s second- and third-largest supermarket chains, to merge in an effort to cut costs, prompting an in-depth investigation by the competition watchdog. Increased competition has prompted Sainsbury’s and Asda, the UK’s second- and third-largest supermarket chains, to merge in an effort to cut costs, prompting an investigation by the competition watchdog.
The Competition and Markets Authority said on Wednesday it would examine whether shoppers could face higher prices or poorer quality of service in hundreds of areas where the stores overlap. It will also examine the potential impact on the fuel and clothing markets as well ason suppliers. The Competition and Markets Authority said on Wednesday it would examine whether shoppers could face higher prices or poorer quality of service in hundreds of areas where the stores overlap. It will also examine the potential impact on the fuel and clothing markets as well as on suppliers.
TescoTesco
AldiAldi
LidlLidl
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Retail industryRetail industry
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