Tesco launches discounter to compete with Aldi and Lidl

British supermarket chain Tesco has formulated its own response to the growing success of Aldi and Lidl: from September onwards, the first branches of a discount chain in Colruyt style will open in the United Kingdom.

Is Jack’s to become the British Colruyt?

Tesco is launching a new formula in the United Kingdom: the distributor is looking for employees for their own discount chain. Around sixty shops should open their doors shortly. British newspaper The Guardian has found out the chain will be called Jack’s. The vacancies speak of small teams in a new company that is completely independent of Tesco operationally.

According to insiders, the new chain shows striking similarities with Belgian supermarket chain Colruyt. Last year Tesco took over wholesaler Booker and would therefore now consider a formula in mind between discounter and cash-and-carry. In existing Tesco stores, more and more large bulk packaging were introduced since the takeover.

Sixty stores to be launched in phase one

Tesco has already looked at thousands of potential locations for the new formula and is currently looking for staff for at least four concrete locations. In Liverpool, there even is a store opening within five weeks.

In the 1980’s Tesco tried to roll out a discount formula, called Victor Value. It was stopped after four years for fear of cannibalisation: a risk the distributor now takes for granted, as Aldi and Lidl today hold almost 13 % of the British food retail and achieve 8 % more sales annually. By contrast, the big four in the UK – Tesco, Sainsbury’s, Asda and Morrisons – are barely able to keep up with rising food prices.