Tesco opens first discount store to take on Lidl and Aldi

Tesco is launching a new discount store format in Cambridgeshire.

Jack's in Chatteris, which opens to the public tomorrow (Thursday) will be the first of up to 15 budget stores that Tesco plans to open in the United Kingdom this year.

Tesco has also launched an array of cut-price goods under in-house brands such as Creamfields, Butcher's Choice and The Growers Harvest, all of which are expected to be stocked in Jack's alongside specialist products under the new chain's name.

Together Aldi and Lidl now have a combined 13.1 percent market share, chipping away at market leader Tesco and its three biggest rivals Sainsbury's (SBRY.L), Asda (WMT.N) and Morrisons (MRW.L).

It also follows Tesco's purchase of wholesaler Booker earlier this year for almost 4 billion pounds ($5.27 billion) to expand into supplying caterers and local shops.

The Jack's stores will stock a unique own brand range, also named Jack's as a mark of quality and value.

Tesco is stepping up its fightback against Aldi and Lidl with the launch on Wednesday of its own cut-price chain, Jack's.

The first Jack's is to open to customers tomorrow in Chatteris, Cambridgeshire.

They have responded with lower prices and better service, although analysts say that with Aldi and Lidl growing at 10 percent each year it makes sense for Tesco to try and capture some of that growth.

It simply said it will be "sharing some exciting news" and did not give further detail, but earlier advertised for staff for a "new store format" in Chatteris.

The Chatteris site was mothballed in 2015 when Tesco was in crisis and is now shared with discount general merchandise retailer Poundstretcher.