Tesco. Hi-Jack’s Discounters.
It was one of worst kept secrets in recent retail history. Last week we finally welcomed the arrival of Jack’s – the new discount fascia from Tesco.
Apparently representing a centenary project by Tesco to honour its original founder Jack Cohen, in reality this is the UK’s biggest grocery retailer’s attempt to tackle the rise of the big two major discounters head on with a promise to sell “the cheapest products in town”. Make no mistake: this is Tesco laying down the challenge – “We too can have a discount operation and compete just as well on quality and price as you do.”
The tagline for the company logo is “8 out of 10 products are British’ and this message was evident during our first glimpse of its launch store in Chatteris, Cambridgeshire. From high-level graphics to Union Jack packaging, the message is clear: by buying Jack’s, customers are supporting home grown, reared or made products.
So is Jack’s a ‘Brexit bargain store’? Tesco says not. It simply reflects what the customer wants, according to Dave Lewis CEO. Being customer centric is what this whole venture is about according to Lewis, in line with Jack Cohen’s ethos for putting customers at the heart of everything he did. Despite this, it’s hard to escape the feeling that Tesco has zeroed in on ‘Buy British’ post-Brexit opportunities – 74% of people in the Fenland district, where the first Jack’s store is located, voted ‘Leave’ in the EU referendum. Coincidence?
Instore, it’s a familiar look.
It maybe stating the obvious, but instore it’s a familiar look. Areas like fresh produce all look very, well, ‘Tesco’. There are clear similarities in offer between Jack’s and its immediate competitors too; WIGIG (When It’s Gone It’s Gone) offers featuring 48 GM products placed in metal baskets for a limited period, ‘Fresh Five’ – a fortnightly changing fresh fruit and veg offer – and a promo magazine for the customer to take away.
The introduction of Jack’s Shop Smart app is different though. Simply scan your goods and pay at the door – far better than standing in an Aldi queue on your lunch break when you only want a sandwich. The app is perhaps one of the most interesting features. And could provide the biggest immediate challenge for its competitors. It was only fairly recently that Aldi began accepting credit card payments. The introduction of self-scan and retailer app payments feels a world away from the current experience in the big two discounters. If they don’t already have plans to do so, they will have to move fast in this area, as it is likely to quickly become a standard expectation of shoppers if a direct competitor offers it.
…10-15 Jack’s stores…hardly a serious challenge.
But by far the biggest question for Tesco’s newest member of the family is one of scalability. For Tesco to make a success of this, they are going to have to move fast – at least 100 stores within the next 2 years. Apparently, that’s not the plan. Instead, its targeted opposition to the likes of Aldi (literally a minute away in Chatteris), could only amount to 10-15 Jack’s stores during the next year. That’s hardly a serious challenge.
It seems that Tesco are taking the slowly, slowly approach and very much testing the waters here. Of the 15 possible stores they will roll out, one will be sited directly next to an existing Tesco store. Test and learn appears to be the order of the day. Some might say that’s wise, but with Aldi and Lidl storming ahead and grabbing the market share it remains to be seen whether Jack’s can deliver the scale of expansion needed to truly get off the starting blocks, let alone win the race for customer loyalty. But while it may have a different name, this is still very much Tesco. So don’t discount them.