Hundreds queue as Tesco opens first Jack's discount stores

Jack’s will carry a range of cheap own-brand products

Jack’s will carry a range of cheap own-brand productsPA

John Perry, managing director of SCALA, added: "With discount retailers Lidl and Aldi reported to control around 13% of the United Kingdom grocery market, it's no surprise that retail giant Tesco has launched its own discount chain, Jack's".

The chief executive Dave Lewis unveiled Tesco's new Jack's chain yesterday, saying the discount stores would sell 2 600 products.

Commenting on the announcement, John Perry, managing director of SCALA, a leading provider of management services for the supply chain and logistics sector, said, "With discount retailers Lidl and Aldi reported to control around 13 per cent of the United Kingdom grocery market, it's no surprise that retail giant Tesco has launched its own discount chain, Jack's".

The first two stores will open on 20 September in Chatteris, Cambridgeshire and Immingham, Lincolnshire.

"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".

It's the first of 10 to 15 openings planned over the next year offering low prices such as £2.89 (RM15.77) for a litre of olive oil. "If we feel that customers are absolutely supportive of what we're doing then yes of course we have optionality going forward", he said.

Mr Lewis said that beyond the initial 15 stores, there is "optionality" for further outlets but it is "not a calculation we're now making".

Tesco's share price rose marginally in the previous session, adding 0.30 percent to close at 235.80p.

"Jack's fits perfectly into the current consumer zeitgeist and will drive revenues as well as protecting margins across the Tesco group", said Freddie Lait, chief investment officer of Latitude Investment Management.

Tesco boss Dave Lewis said the prices would be "the cheapest in town" at each location.

Tesco said that eight out of 10 Jack's food and drink products will be "grown, reared or made" in Britain and stores will stock an own-brand range, also branded Jack's.

The stores to follow will include a mix of purpose-built locations, as well as those that will operate quite literally next door to already existing Tesco stores.

Tesco is still 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.

The flag-waving also lets Tesco contrast its United Kingdom roots with the German ownership of Lidl and Aldi, at a time when Brexit has heightened some Britons' awareness of nationality.

Britain's "big four" grocers are trying to adapt to changing habits, including the declining popularity of big weekly shops and the growth of online shopping.

Mr Lewis admitted that staff at Jack's would not be paid the same as employees at Tesco stores, but would instead be on "more of a base-rate pay".

"I'd rather cannibalise myself than somebody else cannibalise me", he said.

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