Tesco launches no-frills brand, Jack’s, with focus on British provenance

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Tesco has today launched a new brand, and stores – Jack’s. Part of the Tesco Family, Jack’s is claimed to offer great tasting food that is grown, reared or made in Britain at the lowest possible prices to bring customers outstanding value.

Lewis: eight out of 10 products grown, reared or made in Britain

In 1919, Tesco’s founder Jack Cohen started selling armed forces surplus stock from his market stall in Well Street, Hackney. With nothing more than £30 demob money and an intuition for what customers needed, Jack built a business famed for making food available to everyone at a time when many families simply couldn’t afford the food sold in shops.

The launch of Jack’s is part of Tesco’s centenary celebrations which will see the business mark 100 years of delivering great value to British shoppers, the retailer said.

Jack’s aims to support Britain’s food producing communities. Eight out of 10 food and drink products at Jack’s will be grown, reared or made in Britain and stores will stock a unique own brand range, also named Jack’s as a mark of quality and value.

In addition to the Jack’s brand, Jack’s will stock some familiar grocery brands and a range of general merchandise on a “When it’s Gone, It’s Gone” basis.

Jack’s will operate a low-cost business model that is designed to keep costs low and prices down. It’s a no fuss approach with a simplified range of products, no fancy fixtures or fittings, and no added extras, just good quality at low prices.

Dave Lewis, Tesco group chief executive, said: “Jack Cohen championed value for customers and changed the face of British shopping. He’s an inspiration for all of us and that same spirit still drives Tesco now.

“It’s fitting that today, we mark the beginning of Tesco’s celebration of 100 Years of Great Value by launching a new brand, and stores bearing his name: Jack’s. Great tasting food at the lowest possible prices with eight out of 10 products grown, reared or made in Britain.”

Over the next six months Tesco will launch 10-15 Jack’s stores in the UK. The first two stores will open on 20 September in Chatteris, Cambridgeshire and Immingham, Lincolnshire, on sites which make use of excess Tesco space. The stores to follow will include a mix of entirely new sites, sites adjacent to existing Tesco stores, and a small number of converted Tesco stores.

Commenting on the launch, Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “Jack’s isn’t going to make an immediate dent in the competition’s market share – not at the rate of openings announced today. For context, there are already over 1,300 Aldi and Lidl stores across the country and the two have a combined market share of 13.1%, so Jack’s is clearly playing a longer-term game.

“There have been plenty of comparisons to Aldi and Lidl and it’s worth remembering that despite their ‘discounter’ moniker they aren’t particularly downmarket retailers – there’s a real demographic mix among their shoppers. Plenty of people buy from Aldi and Lidl – around 60% of all households shop in each of the discounters at least once a year. However, they spend just £1 in every £10 there and don’t shop at the discounters as frequently as at the big four – given the Jack’s model is so similar we would expect to see shoppers behaving the same way in its stores.

“With its heavy Union Jack branding and promises on provenance Jack’s is clearly looking to make its name as a solid British retailer. Nearly half of shoppers try to buy local produce when they can so it could be a savvy move, though it’s still very early days.”

On the back of the Jack’s launch, the IGD shares the top 10 stats that you need to know about the UK discount channel:

1. Shoppers perceptions of Aldi and Lidl are changing as the food discount channel evolves with shoppers perceiving Aldi and Lidl more as supermarkets than as discounters. Over half (53%) of British grocery shoppers refer to Aldi as a supermarket and 40% refer to it as a discounter and 50% of British grocery shoppers refer to Lidl as a supermarket and 40% refer to it as a discounter

2. Aldi is now a destination for the main shop – nearly half (47%) of Aldi shoppers were on a main shop on their last trip, which is in line with supermarkets. This has increased from 41% over the same period a year ago

3. Some 21% of food discount shoppers claim to have been looking to buy an evening meal on their last shopping trip, which is the same as supermarket shoppers, with 21% also on an evening meal mission. This is likely to have been driven by improved merchandising and increased ranging of evening meal solutions in discount stores

4. IGD forecasts the UK discount channel will account for £1 in every £7 spent on groceries by 2023

5. The discount channel has the highest cash growth sales forecast over the next five years, up 37% from £23.1 billion in 2018 to £31.5 billion in 2023.

6. IGD forecasts discount stores per capita in the UK will double from 2010 to 2023, to reach 5,118 stores

7. The discount channel is well embedded into multichannel shopping behaviour, some 84% of British grocery shoppers visit at least one discounter every month

8. Over half (53%) of London grocery shoppers claim they would use Aldi and Lidl more if there was a store nearer to them

9. Some 43% of London shoppers would use variety discount stores more to buy groceries if there was one nearer to them

10. The top five reasons why British grocery shoppers visit food discounters are:

a. Helps me to save money – 79%

b. Good quality products – 39%

c. More convenient – 37%

d. Good choice of products – 36%

e. Quicker and easier – 26%

The top five reasons British grocery shoppers visit supermarkets are:

a. More convenient – 66%

b. Good choice of products – 48%

c. Quicker and easier – 43%

d. Good quality products – 34%

e. Helps me to save money – 25%

With Tesco also announcing eight out of 10 products ranged at Jack’s will be grown, reared or made in Britain, IGD research also highlights the importance of provenance to British shoppers when buying food and groceries:

11. British or locally produced is one of the top attributes that shoppers use to help define a product as being higher quality. Some 27% of British shoppers claim that British / locally produced helps them to identify a product as being higher quality

12. Nearly half (47%) of British grocery shoppers agree that it is more important to use British suppliers, even if that means food and groceries are more expensive for shoppers

13. Some 78% of British grocery shoppers agree that Britain needs to be more self-sufficient in food and not rely on imports as much

14. Over two thirds (68%) of British grocery shoppers agree that supermarkets should focus more on selling food produced by British farmers

Simon Wainwright, director of insight at IGD, said: “Ambitious store openings have supported rapid discount growth in the UK to date. However, the next period of growth may be more complex for two reasons; there are sizeable opportunities for growth in London and the south east, but competition for the best sites is intense, so we predict discounters will work closer with developers to unlock these sites; cities and towns will see multiple stores from the same discounter, which risks self-cannibalisation of sales. As the discount channel matures, maintaining sales growth will be a challenge.

 

“The discount channel will continue to offer suppliers undeniable growth opportunities, so continuing consolidation and collaboration will offer greater scale, while new store openings will widen their reach. As competition within discount intensifies, differentiation will become more important for individual retailers to stand out. Exclusive products will help discounters to stand out from one another and make it harder for shoppers to compare prices across channels. A stronger and more impactful discount channel will depend on consolidation, centralisation and collaboration.”