When Tesco’s first Jack’s store opened in Chatteris in 2018 the Fenland town found itself in the unusual position of being a must-visit retail destination.

Jacks customer

Tesco has announced it will be axing its short-lived Jack’s store format 

The debut of value format Jack’s was a big moment, seen variously as a capitulation by Tesco in the face of the relentless rise of Aldi and Lidl or a gauntlet thrown down to the discount duo.

A former Aldi executive even advised on the no-frills venture, while its rock-bottom prices and emphasis on British provenance led one analyst to label it a “bargain store for Brexit”.

Less than four years on, the shutters are coming down on Jack’s. In some quarters that is portrayed as evidence that the format was a waste of Tesco’s time and its abandonment marks an ignominious retreat by Tesco.

The truth is more nuanced. While the opening of Jack’s was characterised as a clash of retail titans, Tesco’s take was more measured. 

The fascia was pitched as an anniversary celebration of ‘100 years of great value’ delivered by the retailer since it was founded by Jack Cohen, who the chain was named after. The giant grocer only committed to 10 to 15 branches and the first two utilised excess space – some things never change.

At the time, one of the big questions was why Tesco – which had been built on value-for-money foundations – did not simply double down on price in its core chain.

Tesco’s chief executive at the time, Dave Lewis, maintained: “There are tens of thousands of products and very high density of range in a Tesco store, but there’s a cost of running that level of range.

“[At Jack’s] we’ve got the proposition around being very local in sourcing. There’s just not the volume to do that in Tesco.”

A learning curve for Tesco

Value has become no less important to consumers since Jack’s opened and remains at the top of the agenda as the cost of living rockets. 

However, in the intervening period Tesco has continued to adapt its core business, including by upping the ante on value through its Aldi Price Match scheme. Ideas tried out at Jack’s have made it into the main chain, such as the Fresh Five fruit and veg offer. 

Jacks ailse

Ideas trialled at Jack’s made it into Tesco stores, such as the Fresh Five fruit and veg offer

Disclosing the closure of Jack’s, Tesco UK chief executive Jason Tarry said: “What we have learned from Jack’s has helped Tesco become more competitive, more efficient and strengthen the value we offer to customers.

“As a result, we have consistently attracted new customers to Tesco from our competitors over the last two years and their perception of the value they can find at Tesco has increased significantly.”

There is no reason to doubt those comments. While the closure of a fascia is inevitably seen as a setback, perhaps Jack’s is best viewed as a test-and-learn programme. On that basis, it worked, although clearly not well enough in its own right to justify a big roll-out. 

“What we have learned from Jack’s has helped Tesco become more competitive”

Tesco UK chief executive Jason Tarry

News of Jack’s closure was accompanied by other changes at Tesco. The grocer is closing 317 meat, fish and deli counters in shops where demand is low, and moving away from overnight stock replenishment in some branches. Altogether, 1,600 jobs are at risk although Tesco hopes to re-employ as many people as possible in alternative roles.

The changes, some of which are mirrored across grocery, highlight how tough the environment is as costs rise for businesses as well as shoppers. With an enterprise such as Jack’s, small in comparison to Tesco’s core business, it is best to learn the lessons and move on.

When that Chatteris store opened, analyst Bryan Roberts told Retail Week: “If you see it as a reaction to Aldi and Lidl, it’s a stable-door scenario. But if you also view it as a way of optimising Tesco assets it makes a lot of sense.”

That could serve as Jack’s epitaph – Tesco has made more of its core assets by learning from its value fascia.

The Jack’s brand will live on, supplied to independent c-stores by Tesco’s Booker wholesale arm. Whether it has sufficient pulling power to be an attractive addition to indie shelves remains to be seen. It does not have the heritage of Safeway, for instance, which was relaunched by Morrisons for sale through other retailers.

But the big point is that the Tesco brand survived and ultimately thrived – and Jack’s played a role in that.