“Jacks” of all trade…. Master of the discount one?
This week saw Tesco launch their new branded retail business “Jacks” to compete with the discounters and regain momentum in the retail war. Wednesday saw the unveiling of the brand by CEO Dave Lewis, which has been a close kept secret by employees and suppliers a like. The first 2 stores in Cambridgeshire and Lincolnshire opened their doors to the public with plans for further launches, 10-15 stores across the UK in the next year.
The rumour mill had been running for months with people wondering whether Tesco’s own label brands Rosedene, Boswell or Willow farms would appear in the new store formats, but after the launch it was clear that Jack’s was going to kept very separate. 1,800 of the 2,600 SKUs in store are branded Jack’s products with the other 800being well known brands.
The store format is fresh, simple and minimal SKU’s as expected. You could be mistaken for walking into an ALDI that had applied Jack’s branded stickers everywhere. Similar to other discounters they have a “WIGIG” (When its Gone its Gone) aisle, stacked high with various items people buy that they don’t actually need.But the one focus and USP they have over the other discount retailers is, as Dave Lewis has put it, “Britishness”. 8 out of 10 products are British and support UK farming and manufacturing and it’s a British retailer.
Jacks is being targeted, and quite rightly, at the “price sensitive customers” with store locations carefully selected in poorer populated areas. They have made a statement to be the “cheapest in town” and their price points are very competitive, what will be the response on price by ALDI and LIDL? Let’s be honest prices are at rock bottom already in the discount stores there isn’t anywhere to go! Low operating costs and deals agreed with suppliers have allowed Jacks to get straight into the discount heavyweight ring. An agreement is also in place that products aren’t sold to Jacks at a lower value than they are Tesco, its saved in supply costs such as packaging.
Wage’s will also be less that Tesco employees in Jack’s stores, different working conditions and lower prices mean staff won’t have access to the Tesco’s benefits packages.
The concept and idea isn’t new, they aren’t revolutionising the wheel but what they are doing is trying to take back slice of the pie. UK retail has changed and Tesco are on board. If you want my honest opinion, I was a little disappointed going around, there wasn’t anything that made me think, that’s clever or that’s new. It’s just an ALDI or LIDL with new branding. I know that’s just what Tesco want but I was hoping for a little innovative thinking. Do I think it will work? Yes, I do, but I don’t see Aldi or Lidl shaking in their boots.
Jason Kilbride
Recruitment Director at Henderson Brown
