At the same time the quarterly results for the LADS (Limited Assortment Discounters – Aldi and Lidl) showed they were biting big chunks out of the ‘Big Four’ supermarkets. Lidl had boosted sales by 10% and Aldi by 15%, partly from new store openings and partly from own-label lines. By comparison Asda and Morrison increased sales by only 2.4% and Tesco only 0.9%. The LADS were doing something right.
Retail analysts pointed the finger at an oversupply of supermarket space and limited variety of offer. Unscientific holiday comparisons between Morrisons, Tesco and Intermarche (France) were interesting. OK, the prices were higher in the EU thanks to exchange rates but the sheer variety on offer in France was much greater. The French and Spanish simply crammed more product lines into the same floor space. La Boqueria in Barcelona is worth visiting for that alone.
So in 2018 Tesco revealed a new brand of discount store: Jack’s to challenge the LADS. A refitted store in Chatteris, Cambridgeshire was the first, offering no frills displays and short-term offers from British suppliers. It was aimed at seasoned Aldi and Lidl Shoppers who enjoyed cheap if oddly-named own lines. Whether they could be tempted away was doubtful. Time would tell.
Retail analysts reminded everyone of Sainsbury’s 2016 discounting failure with the Dansk Supermarket Group. In 2014 it had dipped a toe in the pool by partnering with DSG to bring discounter Netto to the UK, selling a discounted selection in 16 stores. It folded two years later because of an ‘increasingly competitive market’. Analysts suggested mimicking the LADS was impractical for the Big Four who were seeking to boost sales: ‘It’s impossible for a supermarket to sustainably price match a discounter which limits it’s number of product lines to achieve better terms with fewer suppliers’.
And therein lies a conundrum for all Market Stallholders and Managers. Do you go for high-volume ‘pile it high, sell it cheap’ products which challenges the Big Four to a budget war? I think not. Or do you aim for specialist product promoted to very specific consumers where you can keep a decent margin but sales volumes are too low to interest the big boys?
In 2022 Jack’s folded and the Chatteris store is now a Tesco. Quelle surprise.