Supermarket giant unveils new discount brand at Chatteris site

Jack's sign

Tesco discount chain Jack's puts British food front and centre

Products grown or manufactured in the United Kingdom are set to make up 80 per cent of all items sold, the firm said, while 1,800 of the 2,600 brands will be under Jack's own label.

Tesco boss Dave Lewis unveils new concept Jack's.

The fledgling chain is named after Sir Jack Cohen, the Londoner who founded Tesco in 1919 and whose motto to "pile it high and sell it cheap" is in keeping with the aim of the new venture.

Jack's represents a new operating model for Tesco as it approaches it's centenary.

Commenting at the launch of the new concept in Chatteris, Cambridgeshire, Lewis said that the strong United Kingdom sourcing focus evident in the store was due to customer feedback, rather than the retailer insulating itself against potential Brexit sourcing challenges.

British provenance will be a key point of difference for Jack's, with eight out of 10 products grown, reared or made in Britain.

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

The new format opens in a Tesco "ghost store", which has lain empty since 2014 when the retailer halted expansion plans after a dive in profits and an accounting scandal.

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Discount retailers such as Aldi and Lidl are growing increasingly popular in the United Kingdom, and the German chains have a combined 13.1% market share of the UK's grocery market.

"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.

Tesco is Britain's grocery market leader with a share of 27.4 per cent, while Aldi and Lidl have increased their combined share to 13.1 per cent, according to the Kantar Worldpanel data.

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.

Over the next six months Tesco will launch 10 to 15 Jack's stores in the UK.

He added: "This reflects the strength of Aldi and Lidl and the volume of their market share". Interestingly, the brand will also locate some adjacent to existing Tesco stores - allowing the new brand to potentially cannibalise sales.

"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.

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