Tesco launches ‘Jacks’ discount model to take on Aldi
TESCO in the UK is in the launch phase of a discount chain, ‘Jacks’, as a competitive response to the inroads of German discounters Aldi and Lidl, writes retail strategy analyst Allen Roberts, of StrategyAudit.
I can only assume Coles and Woolies management here are watching with interest, as they have yet to find a way to combat Aldi in their backyard, and in the absence of a better idea might just copy it, almost as something to do.
Second-ranked Sainsbury’s strategy has been different.
They are ‘merging’ with Wal-Marts Asda chain in a deal reported to be worth 7.3 billion pounds.
This deal would take them past Tesco as the UK’s biggest retailer, and so needs regulatory approval.
Wal-Mart bought Asda in 1999, believing their discount model that made them the biggest retailer in the world by a country mile, would work in the UK.
They have clearly failed in the face of more effective discounters from Germany.
Also in Australian Food News
- Is an anti-Israeli product campaign to blame for Max Brenner’s problems?
- Snacking to manage mood and health
- How Nexba Beverages turned iced tea into a war on obesity
- Catch up on food and beverage mergers and acquisitions
- Tesco launches ‘Jacks’ discount model to take on Aldi
- Food defence – defending against intentional harm
Meanwhile, both Aldi and Lidl are rummaging around in Wal-Mart’s US backyard.
Perhaps Wal Mart have recognised the threat to their dominance is coming from more than Amazon and are hunkering down for a fight?
As this all unfolds, I suspect history will reveal that Tesco has made a huge blue. They are setting out to make Jacks clearly part of the ‘Tesco family’, according to the blurb sprouted by CEO David Lewis at the opening of the first Jacks, just down the road from an Aldi site.
At the same time, they are committed to sourcing ‘British-first’.
This is a mix of business models that must make the Aldi executives giggle with joy, as all it will do is drain money from the Tesco coffers while highlighting Aldi’s positioning as the cheapest around.
Setting out to ‘out-Aldi’ Aldi will be a doomed strategy, particularly as they have already compromised it by being overtly British-first.
This approach may appeal to some, but those who shop at Aldi do so for the price, first, second and last, and will not care about ‘Britishness’, so all Tesco will be doing is damaging their own positioning, and dropping bundles of cash.
From a distance, I hope those few in Coles and Woolies who have been around for a while will whisper some common sense into the ears of their bosses.
Anyone remember Jack the slasher, Franklins, Bi-Low, and Jewel? All discounters, all now gone.
Gelatissimo has released three new Australian summer inspired flavours.
Coca-Cola has embarked on its largest ever sampling campaign to help launch Coca-Cola No Sugar.
Simplot will be taking the iconic Australian Chiko Roll to the world’s largest export trade fair in ...
Australians may not have the money for department stores and jewellery this Christmas, but will be i...
In news reminiscent of Woolworths’ Masters home improvement venture, Wesfarmers has reported it will...
AFTER a decade of turning Coles around, Wesfarmers will demerger their $20 billion supermarket busin...
THE conversation in New Zealand about a sugary drink tax, of perhaps 20 per cent, has reached the pr...
THE 10th annual Products of the Year have been announced, with 10 of the 50 products named offering ...