Tesco to launch discount chain next week

The UK’s largest supermarket group, Tesco is set to launch its new discount chain named Jack’s next week, according to reports.

The first of the stores will be unveiled by the supermarket group’s CEO, Dave Lewis, in Chatteris, Cambridgeshire, on Wednesday, September 19, the Guardian has stated.

The new chain will be called ‘Jack’s’ after Jack Cohen, who founded a business in 1919 that became Tesco, the report added.

Tesco is rumoured to be planning to open up to 60 of the new retail format stores as it looks to gain back market share won by Aldi and Lidl in recent years.

Reportedly, sites in Immingham, Liverpool and St. Helens have been earmarked for potential conversions to Jack's outlets.

John Perry, managing director of SCALA, a leading provider of management services for the supply chain and logistics sector, has commented, “With discount retailers Lidl and Aldi reported to control around 13% of the UK grocery market, it’s no surprise that retail giant Tesco is launching its own discount chain, Jack’s.

“Hoping to capitalise on the desire from consumers for cheaper produce and greater convenience, mainstream retailers have been battling for this extra market share since German chains Lidl and Aldi’s popularity has continued to soar.

“Our UK Logistics Report highlighted some of the ways in which mainstream retailers are attempting to compete with the discount stores, including the streamlining of product ranges. The typical discount retailer has 7,500 SKUs (stock keeping units), compared to 30,000 for a traditional supermarket.

“Prior to the rumoured launch of Jack’s, Tesco said it would remove up to 30% of its product lines as part of its Project Reset. But, it seems, another way to beat the discounters is to play them at their own game.

“The habits of customers in the grocery sector are also changing, with an increasing move towards ‘little and often’ purchasing. In response, Tesco seems to be further developing its Metro and Express models to incorporate customer demand for convenience and competitive pricing.

“Only time will tell as to whether Tesco’s discount venture takes off. However, it is undeniably an innovative move that’s sure to apply further pressure to the other mainstream retailers.”