Supermarket giant Tesco launched a new offensive in its commercial battle with German rivals Lidl and Aldi this week with the launch of a new chain of low cost stores.
Chatteris in Cambridgeshire was chosen as the site for the first Jack’s store and a second will follow soon in Immingham, Lincolnshire. The stores are named after Jack Cohen, who founded Tesco in 1919.
Dave Lewis, chief executive of Tesco, opened the Chatteris Jack’s and said afterwards that there were plans for up to 15 more in the next six months.
Jack’s is Tesco’s response to encroachment into the UK market by the two German supermarkets, who have raced to a market share of more than 13 per cent since 2013.
Their success, based on no frills and low costs, have forced Tesco and other big supermarkets such as Sainsbury’s, Asda and Morrisons to cut their costs to pay for price reductions on basic items.
Up to 80 per cent of Jack’s products will be British and new innovations will allow shoppers to scan and pay using an app instead of queuing at the checkout.
Most Jack’s stores will be converted Tesco Metro outlets and locations include St Helens, Merseyside, and Rubery, Worcestershire.
Tesco is not the first supermarket in the UK to launch a new discount chain. Sainsbury’s teamed up with Danish company Netto to open a chain of stores in 2014, only to close them in 2016. Asda’s Essentials outlets went the same way.
Competition from Lidl and Aldi was behind the proposed merger of Asda and Sainsbury’s, which is currently being considered by The Competition and Markets Authority.
It will consider a number of factors before ruling on whether or not the merger can proceed. These include the potential impact on prices and service and the effect on the fuel and clothing markets, both for customers and suppliers