Jack’s: Lure of own brand and a closure foretold

As Tesco decided to put up the shutters on its Jack’s store chain, independent retailers who were part of this brief experiment told Asian Trader that they had an inkling that this was going to happen.

“We had a feeling this was going to be the case, because the Jack’s range, the product range, is going to go into the cash and carries,” said Mo Razzaq, whose Jack’s of Blantyre store in South Lanarkshire was the first Booker supplied Jack’s store in the UK.

Vijaya Kalikannan, who ran the first indie Jack’s store in England, in Normanby, North Yorkshire, concurs: “We expected this one anyway, because they started the independent trial stores and decided not to go ahead with facia.”

After unveiling the brand as a discount supermarket in 2018 to take on Aldi and Lidl, Tesco launched a trial two years later where Jack’s has been made available as a symbol group format. Razzaq converted his store in October 2020, and Kalikannan, next month.

But, in October 2021, Tesco decided to axe the symbol stores and at the end of January 2022, announced that they will no longer operate stores under the Jack’s brand. Out of the 13 Jack’s stores, six will be converted into Tesco superstores, with the remaining seven stores to close in the coming months.

Razzaq feels that the chain lost its uniqueness when Tesco started offering Jack’s own label products to independents via Booker. “The shop in the corner, the Premier shop or the independent, can carry Jack’s stock as well. So, they won’t be any individuality with Jack’s stores that carry Jack’s stock,” he notes.

Both Razzaq and Kalikannan opine that Tesco is pivoting to own brand, replacing its several own brand ranges available from Booker with one Jack’s brand.

“They are going to discontinue all the Euro Shopper, Happy Shopper, Farm Fresh, Discover the Choice – all too many own brands. Now going to be only one own brand, Jack’s as a part of Tesco family,” Kalikannan says.

“If that’s the case, then I can understand why they want to scrap the Jack’s stores,” Razzaq adds, “because any retailer can pick up Jack’s products.”

Both agree that Jack’s products work well with consumers, and could provide a similar proposition to symbol stores affiliated to Booker what Co-op own brand products offer to Nisa and Costcutter stores.

“Customers like it, the quality is very good. When it becomes price-marked, it comes through,” Razzaq says. “It’ll help retailers because own label carries higher margin than some plans. So it’ll increase our margin more than anything else.”

Kalikannan adds that a recent packaging update has further improved the appeal of the products, alongside the quality and competitive prices.

“In my experience the Jack’s products are good quality, very value for the money. Then a lot of people don’t know, that’s why the packaging changed now, saying Jack’s, part of Tesco family, they put like this in the packaging. So everybody knows that it’s a Tesco product,” he explains.

“Maybe they’re going, in future, maybe they can remove the Jack’s name, and keep all as Tesco products, who knows.”

Lessons learned

Announcing the decision to close Jack’s stores, named after its founder Jack Cohen in its centenary year, Tesco said it has learned a ‘tremendous amount’ from Jack’s, and the knowledge gained from running stores with a low-cost operating model will now be absorbed into Tesco.

“We have learnt a huge amount from Jack’s and this has helped Tesco become more competitive, more efficient and strengthened our value proposition, including through the launch of Aldi Price Match,” Jason Tarry, chief executive at Tesco UK and ROI, said.

“With the learnings from Jack’s now applied, the time is right to focus on ensuring we continue to deliver the best possible value for customers in our core business.”

Tarry claimed that they have been able to consistently attract new customers to Tesco from competitors over the last two years, and their perception of the value they can find at Tesco has increased significantly.

But, Nick Gladding, senior retail analyst at IGD, noted that the store concept appeared to ‘lose its way’ and the focus switched towards selling Jack’s products through Booker symbol outlets.

“At launch, Tesco spoke of building Jack’s into a 10-15 store chain within a year, with suggestions that it could be scaled towards a national presence. This ambition however was never realised, with the store opening programme stagnating and the concept appearing to lose its way,” he said.

Gladding, however, notes that Jack’s has played an important role in enabling Tesco to deliver and promote its value credentials better.

“A popular feature was the Fresh 5 discount fruit and veg proposition – admittedly an idea lifted from other discounters – but something it has rolled out across Tesco and helped to sharpen value perceptions,” he said.

“Jack’s was also committed to being the cheapest store in town, thinking that led to the launch of Aldi Price Match and the reining in of promotions more widely to focus on Low Everyday Prices.”

Gladding added that building Jack’s into a national chain would have been “prohibitively expensive and diluted Tesco’s focus.”

Despite the competitive pricing, Jack’s lacked an equivalent range to match Aldi’s Extra Special and Lidl DeLuxe and innovative product pipeline in key categories such as food-to-go and chilled ready meals, Gladding said, adding that the tiny volumes it could sell acted as a deterrent to supplier investment.

“Tesco tried beating Aldi and Lidl price points. Obviously they couldn’t beat the prices and you can’t run the business losing money for long,” Kalikannan sums it up succinctly.

And, Razzaq adds: “I think Tesco as a company, as they see something that’s not working 100%, they go and do something about it. And I think that’s what’s happened here. So I think Tesco is going back to what they’re good at. And that’s just, you know, standard retailing.”