With less than six months to go until the UK leaves the EU, Tesco has unveiled Jack’s – its new discount store that seems tailored to the Brexit future with low prices and 80% of its products grown, reared or made in Britain.
Jack’s –“low prices, no frills,” according to Tesco CEO Dave Lewis – appears to bridge the gap between what Tesco thinks its customers want, and what those shoppers are currently getting at German discount supermarkets Aldi and Lidl.
And by relying on predominantly British products, Tesco will be able to sidestep possible supply issues that arise from Brexit.
The losers in this sum, however, appear to be workers. With promises of low prices and local sourcing, comes pressure on margins. The result is that workers at Jack’s will not be entitled to the same compensation package – including staff discount and pension plans – as staff at other Tesco stores.
At a special event for media at a new Jack’s store in Chatteris near Cambridge, which opens on Thursday, Lewis said that these workers “will be on more of a base rate”. He also admitted that some Tesco employees have taken redundancy after being told that their current stores will be repurposed as Jack’s or affected in the restructure.
Tesco hopes to open between 10 and 15 new Jack’s branches in 2019, alongside the store in Chatteris, an area that falls within the lowest average earning bracket in the UK, and voted Leave with a 71.4% majority.
The company brushes away the idea that Jack’s is a response to the political climate of Brexit. The focus on British produce is based on research that shows customers would like to see more of it in store, the supermarket says.
“We were planning this long before Brexit happened, and it was just because it was what customers wanted,” Lewis said.
And while Aldi and Lidl do make a point of stressing the British suppliers they work with, Lewis believes Jack’s approach of sourcing eight out of every 10 products from within Britain is one that other stores can’t compete with.
Almost all of the products are stocked are Jack’s own brands - although they won’t be making the same mistake that Marks & Spencer had to rectify by taking away people’s most loved brands: any well-known brand (think Lea & Perrins and Coca Cola) that sells more than five times the average amount of Tesco equivalent, wins a place on the shelves.
Shoppers used to the ever-changing middle-aisles of Aldi and Lidi will feel at home in the new supermarket, with it’s WIGIG (“when it’s gone, it’s gone”) aisle of offers.
In general, however, Tesco’s says Jack’s will offer stable prices that Lewis declared would be “cheapest in town” – though he also said that were a customer to buy a basket of Tesco-exclusive products in a regular Tesco store, they would pay about the same price.
Looking around Jack’s range which is smaller than the offering in Tesco – there are only one or two options for every food product rather than the ten you would find in a normal Tesco – some prices seemed to be around the same as those charged for the Tesco essential range. We spotted carrots at 43p per kg, aubergines at 70p each, and salsa at 80p.
A loaf of white bread was around 50p in Jack’s, and branded non-dairy milk options were the same price. Some items did seem cheaper in Jack’s: olives were 10p cheaper and Cherry Bakewell box 30p cheaper than in Tesco.
Customers will be able to compare details for themselves before long: in one location, yet to be revealed, there is set to be a Jack’s and a Tesco side-by-side, Lewis said.
Pressed on whether he was concerned about Jack’s cannibalising Tesco’s business, the CEO said that he would sooner the business cannibalise itself, than let someone else do it. However, he believed there was room for both stores. “If you ask me personally I think they can co-exist, but we’re gonna wait and see,” he said.
We met John, who has worked at Tesco since 2007, in the carpark. He had come to take a look at the new Jack’s site with his dog Parker and said that he thought people shopped because of prices, not British produce. “All that’s for the patriots,” he laughed. “[For] most people, it’s about what they’ve got in their pocket, about the cost.”
The new Chatteris store is housed inside a building that was owned by the Tesco estate for years but mothballed in 2015 when Tesco was in crisis. Tesco says it hopes Jack’s will appeal to millennial shoppers.
As at Aldi and Lidl, customers will be greeted with products in crates and pallets – another cost-saving measure but also an aesthetic choice that Tesco says will remind people of the nostalgia of buying fruit and vegetable from a market stall. The same goes for the hessian bags of potatoes.
The floors are polished concrete – both trendy and, we’re told, easier to clean (one of the thousands of minuscule details considered in the build to ensure the running costs at Jack’s are kept as low as possible).
At the checkout, staff will wear their own clothes rather than uniforms, while customers can choose to pay in one of three ways: at a till with a member of staff, at the self-service checkouts or via an app that lets you scan items as you shop.