AS supermarket giant Tesco opens the first of its Jack’s cut-price food stores, the obvious question from consumers is why, if the company can make money selling goods at such low prices, is it still persisting with its more expensive ranges in existing shops?
Surely, if Tesco is serious about wanting to challenge Aldi and Lidl, who are running away with the discount market, it should offer all of its customers a better deal?
Tesco chief executive Dave Lewis is perhaps wary of previous failed efforts by Sainsbury’s (Netto) and Asda (Asda Essentials) to get in on the act, and is hedging his bets.
While price is an important factor in where shoppers choose to buy their groceries, quality is also an issue. Aldi and Lidl are renown for offering quality and value, so if Mr Lewis is mainly offering cheap own-brand items, the model does not look promising. And no-one should underestimate the attraction of a spacious, free car park in making up the mind of a consumer torn between rival stores.
The Jack’s brand focuses on Tesco’s long heritage, and plays up its Britishness – eight in ten products on the shelves will be grown, reared or made in the UK. Bearing in mind that Tesco’s recently rebranded fruit and veg was given traditional English names, despite some of it being grown abroad, it will be interesting to see just how British the Jack’s produce is. Only time will tell if the Jack’s experiment works out for Tesco, but if it is just a poor imitation of what is already available, consumers will soon work it out.
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