The Financial Times reports that Tesco, after years of watching discounters Aldi and Lidl nibble away at its UK sales and market share, and take bigger bites out of its margins, plans to launch a new chain of discount stores that it hopes will be better positioned to do battle in this segment.
While Tesco has not commented on these plans, the story points out that it has been advertising for job openings at an entity that will be run separately from its core flagship brand.
FT writes that there could be as many as 30 units opened in short order this autumn, with the possibility that the chain will be called Jack’s - a likely reference to Tesco founder Jack Cohen.
According to the story, “Bruno Monteyne, analyst at Bernstein, said Tesco was in a position to launch the new stores because it would be able to supply them with its own-label Farm Brands — priced within 2 per cent of equivalent hard discounter products — while its merger with wholesaler Booker last year also allowed it to provide competitive prices on some items.”
While Tesco has not commented on these plans, the story points out that it has been advertising for job openings at an entity that will be run separately from its core flagship brand.
FT writes that there could be as many as 30 units opened in short order this autumn, with the possibility that the chain will be called Jack’s - a likely reference to Tesco founder Jack Cohen.
According to the story, “Bruno Monteyne, analyst at Bernstein, said Tesco was in a position to launch the new stores because it would be able to supply them with its own-label Farm Brands — priced within 2 per cent of equivalent hard discounter products — while its merger with wholesaler Booker last year also allowed it to provide competitive prices on some items.”
- KC's View:
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I guess my question is about the degree to which Jack’s - if it ends up being called that - actually is separate from Tesco. Hard to imagine that it will be completely divorced, simply because Tesco will want to take advantage of its greater buying power and operational infrastructure. The problem is that you can’t be just a little bit pregnant … if you want to foster a truly different culture and image, you have to really be separate, as if created by a kind of skunkworks. But that works against typical corporate mindsets.
It’ll be interesting to see how this plays out, and if Tesco is able to do this efficiently and effectively.
