Tesco’s new discount chain Jack’s will be ‘cheapest in town’ and focus on ‘Britishness’

New chain will create up to 375 new jobs and will be cheaper to run, allowing it to offer lower prices, chief executive Dave Lewis said


Caitlin Morrison
Wednesday 19 September 2018 13:45 BST
Tesco launches discount store Jack's to take on Lidl and Aldi

Tesco has launched its new discount brand, Jack’s, as it fights to regain market share from the likes of Aldi and Lidl, with two stores set to open on Thursday and up to 15 planned for next year.

The new chain has been the subject of weeks of speculation. It is the result of more than two years of planning, working with over 350 supplier partners, and at a launch in Chatteris, Cambridgeshire, on Wednesday, the focus was on the “Britishness” of the brand and lower prices.

Jack’s will be the “cheapest in town”, according to the supermarket’s chief executive, Dave Lewis, through a combination of deals agreed with suppliers and lower operating costs at its pared back stores. “It’s very simple to run, it allows us to lower prices,” he said.

Supply costs will be reduced due to changes to packaging, but no products will be supplied to Jack’s at a lower value than they are sold to Tesco, Mr Lewis said.

The new stores will also offer a much smaller range of products than a traditional Tesco branch, with around 2,600 against the tens of thousands on sale in Tesco. Of the 2,600 product lines, 1,800 will be Jack’s own-brand.

Meanwhile, eight out of ten products at Jack’s will be made, grown or reared in Britain, and most of the packaging reflects this, with Union Jacks adorning several items.

This focus on Britishness has “nothing at all” to do with Brexit, Mr Lewis said, but reflects customers’ preference for locally sourced food and drink.

Jack’s will be targeting “price sensitive customers”, and will open accordingly in areas with poorer populations.

The Chatteris store has been created at a site previously earmarked for a new Tesco, which was mothballed four years ago, and the Immingham, Lincolnshire branch, which also opens on Thursday, uses a similar space.

Of the 10 to 15 Jack’s shops planned for next year, five of them will be repurposed Tesco properties, some of which will be mothballed sites, but most of which will be current Tesco Metro stores.

In terms of competing, Mr Lewis said he is not concerned about the risk of losing custom from Tesco to Jack’s: “I’d rather cannibalise myself than have somebody else cannibalise me.”

As if to prove this belief, the company will open at least one Jack’s “right beside a Tesco”.

In terms of competing with Aldi and Lidl, which are rapidly eating up market share in the highly competitive supermarket space, Jack’s will offer the lowest prices within the local area around each store, rather than competing on a national level.

The new brand will not offer any online element, aside from an in-store app which will allow customers to scan products as they shop.

The group said no jobs will be lost through the creation of Jack’s, although some staff took voluntary redundancy rather than staying on as Jack’s employees or moving to another Tesco site.

The company said between 20 and 25 jobs will be created per new Jack’s store, meaning the total number of new roles created could reach 375.

However, the lower price offering will also mean lower wages for staff, Mr Lewis said, “because working conditions will be different”. Employees will be offered a base rate of pay, rather than the usual benefits package Tesco staff get.

The Jack’s brand is being launched as part of the group’s centenary celebrations, and has been named in honour of Tesco founder Jack Cohen.

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