Can Tesco’s new discount store Jack’s compete with Aldi and Lidl?

Tesco are launching their new discount store, Jack’s, this September, and planning to roll out 10 to 15 stores across the UK within the next six months. The stores will contain around 2,600 product lines, which are mostly Jack’s branded. They will be positioned next to Tesco stores or be converted Tesco stores.

Some of the features of Jack’s include an express checkout app for faster shopping, promotions across fruit and vegetables, and the promise that 80% of products are made in the UK.

But is Jack’s entering an already crowded market?

Aldi and Lidl are German discount supermarket chains that came to the UK in 1990 and 1994, and their origins date back to the early 20th century. They each have over 10,000 stores across the world.

Aldi and Lidl are catching up to traditional supermarkets, both in geographical spread and quantity of stores. Both chains have over 700 stores each across the UK. They are now established brands in the minds of consumers. When they first came to the UK they had to fight the notion that their products are of lower quality, but these views have shifted in recent years.

Tesco, on the other hand, has over 3,400 stores in the UK, including Tesco Express, Tesco Metro, and One Stop.

What the data says about Jack’s

We asked the Aldi and Lidl shoppers among our Vypr panel whether they would trust Jack’s to match the established discount retailers on price and quality. 66.8% of those shoppers said they would, giving Jack’s a good opportunity to try and win over customers from Aldi and Lidl.

According to data from Kantar Worldpanel, Lidl’s market share increased to 5.2% in 2017, a new record for them. They have increased their market share by 0.7% each year, and are now the UK’s seventh largest supermarket chain. Boosted by their Backing British campaign, Aldi’s market share has increased to 7%.

The discount retailer is continuing to rise. We can’t say for certain whether Jack’s will succeed, but they will definitely face some tough competition from other discount options.

Photo credit: Rob Enwiki

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