Britain’s Tesco takes on discount rivals with launch of Jack’s

A customer passes a branch of the Tesco Express convenience store in central London December 2013

Image Tesco has been closing poorly-performing convenience stores and could place some under the new brand

The new brand will offer customers the "lowest possible prices" with 8 out of 10 products sourced in the UK.

The new store format opens its doors to the public for the first time on 20 September at two locations: Chatteris Cambridgeshire and Immingham, Lincolnshire.

CEO Dave Lewis said food and drink items will go on sale at "the lowest possible prices", as Britain's largest retailer fires the latest shot in a highly competitive sector, often described as "supermarket wars".

It was reported in July that Tesco was close to launching a chain of discount stores in Britain called Jack's, after Jack Cohen, who founded a business in 1919 that became Tesco.

Jack's will have a range of 2,600 products, is less than a Tesco classic, which many will be sold under the new brand. "If you ask me personally I think they can co-exist, but we're gonna wait and see", he said.

The group intends to both open new supermarkets and to transform a few shops Tesco in Jack's, which will create 250 jobs.

"The intention is for us to be cheapest in town", he said at the Chatteris store, which was built as a Tesco supermarket, but was mothballed in 2015 when the group was in crisis.

The stores will also stock some familiar major brands, such as Coca Cola, as well as a range of general merchandise on a "When it's Gone, It's Gone" basis.

However, its dominance is threatened by Aldi and Lidl, which combined enjoy a 13.1 per cent share of the grocery market.

"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.

As shopping habits have changed after the financial crisis and the growth of online shopping, with thrift and smaller but more frequent shops now more common, Britain's big four grocers are scratching their heads over how to better defend their market share.

Between 10 and 15 other stores are expected to open over the coming months across the country over the coming months.

"Plenty of people buy from Aldi and Lidl - around 60% of all households shop in each of the discounters at least once a year", he said. Interestingly, the brand will also locate some adjacent to existing Tesco stores - allowing the new brand to potentially cannibalise sales.

Latest News