Tesco opens new discount chain Jack’s
As shoppers flock to small convenience stores . . .
TESCO unveils its discount chain Jack’s today as the major supermarkets continue to lose market share to Lidl and Aldi.
Britain’s biggest supermarket will reveal its plans to take on the discounters with a cut price offer of its own as it battles to win customers.
The name is a nod to Jack Cohen who founded Tesco in 1919.
The launch of the format at Chatteris in Cambridgeshire comes just 24 hours after industry figures laid bare the pressure facing large supermarkets.
Not only are Tesco and rivals Sainsbury’s, Asda and Morrisons suffering at the hands of German discounters Lidl and Aldi, but shoppers are using smaller convenience stores rather than the large-format supermarkets.
A report by consumer research group Kantar Worldpanel showed sales across convenience stores owned by the big supermarkets were 7.6pc higher in the 12 weeks to September 9 than they were in the same period last year. This compares with a 3.8pc rise in sales across the entire industry.
Shoppers spent almost half a billion pounds more on keeping cool over the summer as they coped with the heatwave.
Between the World Cup kicking off in June through to the August bank holiday and beyond, shoppers spent £228m more on alcohol, £178m more on soft drinks and £74m more on ice cream compared with the same time last year.
Aldi saw the biggest increase in sales, up 13.9pc, while the Co-op was a big winner with sales rising 8.5pc, its best performance since 2011 and ahead of the 8.3pc growth seen at Lidl. Asda was the best of the Big Four, with sales up 3.1pc, while Morrisons saw 3pc growth. Tesco sales rose 1.9pc but Sainsbury’s was the worst performer with sales up just 1.6pc. Fraser McKevitt, head of retail and consumer insight at Kantar, said: ‘The warm summer has been kind to the supermarkets’ convenience format stores as consumers shopped locally for drinks and barbecue supplies.’
Earlier this year Tesco admitted it was ‘eyeballing’ Aldi and Lidl as it launched 15 budget own-label brands, which have been designed and named similarly to local and independent companies.
The Kantar data revealed the range is proving a hit with customers, accounting for £90m of sales over the period.
The format of Jack’s and what will be stocked have been kept under wraps but Steve Dresser, an independent analyst, said: ‘Given precious little innovation or risk in the UK market at the minute, this move is great news.’
Natalie Berg, retail analyst at NBK Retail, added: ‘ Tesco couldn’t pay the discounters a greater compliment. This launch is an admission that the likes of Aldi and Lidl have fundamentally changed the way we shop.’