Tesco is to pull the plug on its Jack’s discount chain, as part of a sweeping series of efficiency cuts which will put 1,600 jobs at risk.
The Jack’s chain was launched three-and-a-half years ago as Tesco’s attempt to take the fight to Lidl and Aldi with its own version of a discounter.
Last night it announced that of the 13 Jack’s stores which have opened, six would be converted to Tesco superstores and the remaining seven will be shuttered in the coming months.
Whilst 130 roles will be put at risk by the closure of Jack’s stores, Tesco today revealed 1,600 jobs in total were at risk of redundancy as it axes night replenishment in 36 large stores and 49 c-stores, and converts 36 petrol filling stations to pay-at-pump only during overnight hours.
Jack’s, named in honour of Tesco’s founder Jack Cohen, was launched amid much fanfare with the first stores in Chatteris in Cambridgeshire and Immingham in Lincolnshire.
However, plans for an aggressive rollout, originally aimed at up to 15 stores in the first six months, stalled and the operation struggled to find the necessary scale to put a serious dent in the fortunes of its German discount rivals.
Tesco said 130 jobs would go at the stores which close and at the retailer’s head office, although it said it would try to find alternative roles for the staff affected.
Tesco UK CEO Jason Tarry claimed it had learned “a tremendous amount” from the Jack’s experiment but said the time was right to focus on its core business.
Tarry claimed Jack’s had provided a platform for tools used across the Tesco estate to become more price-competitive, including the popular ‘Fresh 5’ fruit and veg discount proposition.
It also announced Jack’s branded products would continue to be available to independent convenience stores supplied by Booker – one of the experiments it has tried as it positioned Jack’s as a “test bed” for ideas rather than a scalable entity in its own right.
Tesco said the wave of cuts was to simplify the business and concentrate on its core offer. The cuts also include the closure of counters in 317 stores, following the closure of counters at 100 large stores in 2019, with the retailer saying it would look to repurpose the space to better reflect customer needs.
It stressed there would be no redundancies as a result of the latest counter closures, unlike the previous round which was part of a major overhaul affecting 9,000 jobs, with staff being offered alternative roles.
Tesco blamed the counter cuts on a shift in shopping patterns and a continuing effort to make the business more efficient.
However, it said in 279 stores where it saw continued local customer demand for meat, fish or hot deli counters, it would continue to offer counter services.
The move away from overnight replenishment to daytime trading hours follows what it called successful trials which showed it could ensure more colleagues were available on the shop floor to help customers at peak times.
“We operate in a highly competitive and fast-paced market and our customers are shopping differently, especially since the start of the pandemic,” said Tarry.
“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.
“In turn, this has enabled us to consistently attract new customers to Tesco from our competitors over the last two years and we know they increasingly recognise the value they can find at Tesco.
“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.”
He added: “Our priority is to find roles within our wider business for all the colleagues who want to stay with us.”
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