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Will Jack's eat up Tesco?

Penny Brooks

20th September 2018

Tesco's are fighting back. They have had many difficulties in the last few years, and although they are still our biggest supermarket, they have lost ground from a 32% share of the market to 27.4%. Now they face being overtaken as the UK's biggest supermarket chain by a combined Sainsbury's and Asda, in a proposed merger which is being investigated by the Competition and Markets Authority. Much of Tesco's market share has been lost to the discounters; Aldi and Lidl now share just over 13% of the market between them.

So Tesco's response is to launch their own discount stores, branded as 'Jack's'. To underline their determination to get this business approach right, they have hired the former Aldi executive Lawrence Harvey to run Jack’s.

There are many questions that analysts are asking about the new store.

  1. Will it be a copy of Aldi and Lidl or will it differentiate itself?
  2. Have they got the pricing right?
  3. Will it cannibalise Tesco's business?
  4. Will it be wide-spread enough to make a difference to the market shares?
  5. Will it do any better than Sainsbury's 'Netto', launched in 2014 but closed two years later, or the 'Asda Essentials' chain which also quickly failed.

These would be good questions for students to have a go at answering. They can use these two articles to help produce a report of their own: Tesco's new discount chain Jack's takes on Aldi and Lidl, from the BBC, and Tesco opens discount store Jack's to take on Lidl and Aldi, from the Guardian.

Penny Brooks

Formerly Head of Business and Economics and now Economics teacher, Business and Economics blogger and presenter for Tutor2u, and private tutor

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