Jobs at risk as Tesco axes low cost Jack’s stores and shuts more than 300 deli counters
Tesco is axing its chain of low cost stores and shutting more than 300 deli counters in a major shake-up.
The supermarket giant launched Jack’s – named after Tesco founder Jack Cohen – to much fanfare in 2018 to compete with German discounters Aldi and Lidl.
However, less than four years on Tesco is planning to permanently close seven of the 13 Jack’s stores while converting the remaining six into superstores under its own branding.
Tesco launched Jack’s – named after Tesco founder Jack Cohen – to much fanfare in 2018 to compete with German discounters Aldi and Lidl
The seven shops marked for closure – in Hull; St Helen’s in Lancashire; Walton in Liverpool; Castle Bromwich in the West Midlands; Middlewich in Cheshire; Barnsley; and North Liverpool – will be shuttered in the coming months, putting 130 jobs at risk.
Tesco will continue to provide Jack’s branded products to independent convenience stores supplied by its Booker wholesale business.
‘We have learned a huge amount from Jack’s, and this has helped Tesco become more competitive, more efficient and strengthened our value proposition,’ said Tesco’s UK & Ireland boss Jason Tarry.
‘With [what we learned] 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.’
Lessons from the Jack’s project that have been incorporated across Tesco stores include Aldi price matching as well as its ‘Fresh 5’ fruit and veg discounts.
However, the closure of the chain will mean ditching part of the legacy of former Tesco boss Dave Lewis, who was in charge from 2014 to 2020 and was widely credited with helping turn the company around following an accounting scandal and a string of profit warnings.
He handed over the reins to Ken Murphy in October 2020.
Retail analyst Clive Black at Shore Capital said Jack’s had always been a ‘sub-scale business’ at Tesco and that it was not worth the expense to keep operating its relatively small estate.
‘To run a discounter you need hundreds of stores,’ he said. ‘Thirteen just isn’t feasible in the long run. Jack’s has reached the end of the line.’
Meanwhile, Tesco also announced that it will be closing meat, fish and hot deli counters in 317 of its stores due to low demand. The service will remain at just 279 Tesco stores.
The move is expected to affect hundreds of workers, although the retailer stressed that there would be no redundancies related to the counter closures. Tesco currently has 3,000 vacancies.
However, Black said the move would be ‘very good news’ for Tesco rival Morrisons, which will be the only major supermarket left still offering widespread counter service to shoppers.
Tesco enjoyed a bumper Christmas with industry figures from Kantar recently showing it outperformed its major rivals in the 12 weeks to Boxing Day.
The grocer’s market share hit 27.9 per cent – its highest level for four years. Tesco shares fell 2.1 per cent, or 6.4p, to 297p.