Tesco’s new discount store, Jack’s, is now a year old. Although the CEO promised, when the first Jack’s opened, that 10-15 discount stores would be opened in the first six months only ten have been opened so far. Sales/square foot are believed to be low (sales up to June 2019 were only £24m). There are no figures on profits. Jack’s states that 80% of its products are British sourced.
The stores are widely dispersed, so there can be few economies of management and distribution. Locations include: St. Helens, Wavertree (Liverpool), Liverpool, Barnsley, Immingham, Timberley Lane Castle Bromwich, Rubery, Middlewich (Cheshire) and Chatteris (Cambridgeshire).
The Tesco Group has more than 3,000 stores so Jack’s has some way to go before it provides a way for the Group to deal with grocery discounters. Most analysts quite like it and feel it is too early to dismiss Jack’s as mission impossible. The shops sell 2,600 items and have a pronounced price-orientation which would be familiar to Jack Cohen, the originator of Tesco. The average Tesco store sells around 25,000 items. There are a number of non-food lines like electricals, stationery school sets and storage boxes that are ‘When It’s Gone, It’s Gone’ (WIGIG), there is an app for in-store shopping, Tesco is having to learn (again) how to run a grocery business frugally that is expected to operate on the lowest mark-up practicable. This will take time and require a lot more investment.