Tesco launches discount stores to counter Aldi and Lidl


The first two Jack's stores will open to shoppers on Thursday, with another 10-15 following in 2019 as Tesco seeks to compete better with the German upstarts whose limited-range stores have won over increasing numbers of British shoppers since the economic crisis hit in 2008.

Customers will be able to compare details for themselves before long: in one location, yet to be revealed, there is set to be a Jack's and a Tesco side-by-side, Lewis said.

Shoppers have a new supermarket option to consider as Tesco launches a new cut-price brand named after the firm's founder.

"It's what our customers told us", Lewis explained.

"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".

Additionally, eight out of ten food and drink products stocked at Jack's supermarkets will be grown, reared or made in Britain.

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"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.

"We leverage the size and expertise that's available to Tesco and Tesco partners and we bring that capability to Jack's in an operating model that is lower and we pass that benefit on to our customers", Mr Lewis said on Wednesday. Since muscling in on the United Kingdom grocery market five years ago, the incumbents have been powerless to halt the march of Aldi and Lidl as they have gobbled up market share at a dizzying rate.

With its emphasis on a United Kingdom product base, Tesco has finally launched a response to the high street threat of European retailers Aldi and Lidl.

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. Plenty of people buy from Aldi and Lidl - around 60% of all households shop in each of the discounters at least once a year.

They have lowered prices and improved service, but analysts say that with Aldi and Lidl growing at 10 per cent each year it makes sense for Tesco to try to capture some of that growth. (4278421) Launch of Jack's supermarket in Chatteris.

However, some are concerned Tesco's new format could simply cannibalise sales at its existing stores.