Tesco to open discount store Jack’s on Thursday

Tesco (LON: TSCO) will open its new discount store on Thursday morning, attempting to intensify competition with Aldi and Lidl.

Tesco chief executive, Dave Lewis, unveiled the store in Cambridgeshire and the second store will open in Immingham, Lincolnshire.

Lewis has said Tesco will open between 10-15 Jack’s stores over the next six months, half of these will be converted from underperforming Tesco metro stores.

The store is named after the founder of the supermarket, Jack Cohen.

“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,” said Lewis.

“It’s fitting that today, we mark the beginning of Tesco’s celebration of 100 years of great value by launching a new brand, with 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.”

Tesco is not the first of the main UK supermarkets is launch a discount chain. In 2014, Sainsbury’s opened Netto stores with the Danish chain’s parent group however, they were closed two years later after they failed to make a profit.

In 2006, Asda opened the Asda Essentials chain, which also closed soon after. 

Whilst Aldi and Lidl have seen a growth in market share to 7.6 percent and 5.5 percent, Tesco remains the biggest of the supermarkets with a market share of  27.4 percent.

Sainsbury’s (LON: SBRY) and Walmart-owned Asda (NYSE: WMT) are also planning a £15 billion merger that would make a combined company the biggest supermarket chain.

The Competition and Markets Authority announced on Wednesday plans to conduct an in-depth investigation into the merger.

“The companies are two of the largest grocery retailers in the UK and their stores overlap in hundreds of local areas, where shoppers could face higher prices or worse quality of service,” the CMA said.