Hundreds queue as Tesco opens first Jack´s discount stores

Dave Lewis Tesco chief executive said that Jack’s would offer “the cheapest products in town”

Tesco's no-fuss approach is also a strategic move by the United Kingdom retailer to keep those cost prices down, in an effort to compete with discount stores such as Aldi and Lidl.

With the new chain, Tesco has to walk a fine line, challenging the discounters while avoiding cannibalisation of its main store brand with lower prices.

Pile them high, sell them cheap: the founding principle of Tesco's first proprietor, Jack Cohen nearly a century ago.

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

The company's new discount chain - Jack's - opened its first two stores on Thursday, in a bid to rival cut-price competitors such as Aldi and Lidl.

"Hoping to capitalise on the desire from consumers for cheaper produce and greater convenience, mainstream retailers have been battling for this extra market share since German chains Lidl and Aldi's popularity has continued to soar".

As part of the Jack's store presence, Tesco also will launch Jack's branded goods, a unique range of staple food items that presents shoppers with quality and value.

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The group's chief executive, Dave Lewis, attended the opening of the first store today in Cambridgeshire.

According to a company release, Jack's will operated a "low-cost business model" which, Tesco said, is created to keep costs low and prices down.

Competition at the top of the United Kingdom supermarket sector has continued to intensify since the initial price wars to attract customers and protect market shares in the stampede to the discounters.

The brand is being widely hailed as a challenger to Aldi and Lidl, which have eaten into the market share of Britain's so called "big four" supermarkets. The typical discount retailer has 7,500 SKUs (stock keeping units), compared to 30,000 for a traditional supermarket.

Neil Wilson, chief market analyst at Markets.com, said of the launch: "I think having a separate brand is really interesting as it allows it to offer different products at different price points without affecting its core Tesco brand". He's an inspiration for all of us and that same spirit still drives Tesco now. "Great-tasting food at the lowest possible prices with 8 out of 10 products grown, reared or made in Britain".

Tesco copies the tactics of the German discounters, whose limited-range stores have won over increasing numbers of British shoppers.

And he played down Jack's' financial significance to the group: "It's not a calculation that we're now doing", he said.

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