Tesco Launches Jack’s Discount Grocery Concept

To take on discount grocers Lidl and ALDI, Tesco is rolling out a chain called Jack’s. The retailer intends to open 10 to 15 locations next year, Financial Times reported.

The stores will offer roughly 2,600 items. The majority of the produce will come from suppliers within the U.K., and most of the selection will carry the Jack’s brand. Tesco Chief Executive Dave Lewis said the concept will be geared toward “product and price.”

Although the Jack’s stores will not offer online ordering or take the Tesco’s loyalty card, pricing will be similar to “exclusive to Tesco” items in the retailer’s mainstream stores. Pricing will be compared locally, while most grocers “decide pricing nationally,” according to the report. Overall, Lewis told FT, “we are confident we can build something that is competitive on price while generating margins that support a return on our investment.”

Tesco has been working on new initiatives to boost sales. Last year, the retailer launched both a one-hour and two-hour delivery option in London via its Tesco Now app on both Android and iOS. Customers are limited to 20 items or fewer for delivery by moped.

And last July, the retailer introduced its contactless loyalty card, Clubcard, allowing customers to add points to their cards without a keychain card. The company has also made updates to its loyalty Clubcard, giving customers the option to sign up in the store and providing access to vouchers at checkout. And in January, a competition regulator approved the company’s 3.7 billion pound ($4.95 billion) takeover of wholesaler Booker.

In addition, Tesco is testing a checkout-free payment method in the U.K. Months after Amazon rolled out its cashierless convenience store dubbed Amazon Go, the British grocer is experimenting with the concept on its corporate campus with a Tesco Express C-store. Tesco Convenience Transformation Director Steven Blair said in June, “using your mobile device, you select some products, put them into your basket on your device and then just walk out of the store. The feedback is very good on it, but it’s super early.”