The new supermarket chain would be called Jack’s, which is named after Jack Cohen, the founder of Tesco. Jack’s will be a new line of retail stores located in Cambridgeshire and other British cities and towns, which would function separately from Tesco’s primary stores. The objective behind setting up the new supermarket chain is to be the most inexpensive in town.
Tesco supermarkets typically sell upwards of 25,000 products. However, Jack’s would stock only 2,600 items, just like Lidl and Aldi. Close to 70 percent of the items in the new supermarket will be dairy products, such as eggs and milk, and fresh meat and bread. More than 700 big-name products would also be part of the line-up, including brands such as Bovril and Coca-Cola.
Jack’s will be selling predominantly British, low-priced food and cater more to the economically challenged buyers in Cambridgeshire who are always on the lookout for a bargain. The focus on British items is to help differentiate the chain from Lidl and Aldi.
Wanting to take up the battle against discount stores is great, but it doesn’t come with its share of challenges and obstacles. This bold move could damage reputation of the primary Tesco brand. Also, from the look of things, this new project is not short-term and would, therefore, warrant great level of investment and time, which could divide focus and disrupt sales of the main brand.
If Tesco is serious about taking on its German counterparts, it must be steadfast. Not too long ago, in 2014, Sainsbury tried something similar by partnering with Netto. Unfortunately, it had to drop the plan after a couple of years as it could not expand sizeably or quickly enough. Sainsbury quit also because its efforts were undermining its main brand.
France is the only European nation were efforts by major local supermarkets to thwart foreign contribution paid off. Those established French stores managed to pull it off by adopting the strategy of combining large price cuts and fewer complex promotions.
Just because other supermarket chains didn’t succeed with discount stores, it doesn’t mean new attempts would meet the same fate. Things could have changed over a period, which could go in favour of Tesco. For instance, shoppers a few decades ago may have discriminated against their own-label products. Shoppers in 2018 and in the future would probably not do so.
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