With Tesco summoning leading industry journalists and analysts to rural Cambridgeshire next Wednesday, for the unveiling of what is believed to be the retailer's foray into the limited assortment discount market, speculation is rife as to what the nature of such a business could look like.
Indeed, with media reports suggesting that staff have been asked to sign non-disclosure agreements about the project, there are signs that this could be one of the biggest new Tesco launches for some time, and not a typical store opening.
Indeed, ESM will also be in attendance for the 'big reveal' next Wednesday morning in Chatteris; watch out for live updates from the site throughout the morning on www.esmmagazine.com.
Store Count
Speculating on the new concept, analysts Shore Capital said as many as 50-100 stores could initially be opened under the new format, which it is dubbing 'Jack's', after Jack Cohen, Tesco's founder.
'Many of the Jack's conversions may be smaller supermarkets (c8-15k sq. ft.), possibly Tesco Metro sites looking at Edge Hill in Liverpool, that trade in tough markets with low local incomes and high levels of competition from the limited assortment discounters (LADs); indeed quite a few maybe ex-Kwik Save stores acquired by Tesco,' Shore Capital said.
Shore Capital also speculated that the new format stores may be serviced from the recently-acquired Booker wholesale network, rather than through Tesco directly.
"Given the dispersed nature of such stores, mentioned above, and Tesco UK's work on a streamlined network of more volume going through its supply chain from fewer suppliers, intermediaries and employee hands, we wonder if the potential Jack's will be serviced from the Group's Booker network rather than complicating Tesco's high octane system?," Shore Capital wrote.
The firm also suggested that while the new concept will undoubtedly have to 'crawl before he walks before he runs', the arrival 'does bring with it a modicum of excitement and intrigue'.
Crossover Format
Elsewhere, Bernstein Research said in a briefing note that the format launched next Wednesday is 'likely to be a 'new' format, not a copy of hard discounters, but more likely a cross over between a cash & carry and a discounter.'
It suggested that Tesco has shown in the recent past that it appears to be preparing for this type of format, developing its discount range of products, lowering prices and pushing the 'Exclusive at Tesco' message.
'If successful, this new retail format is likely to put material pressure on all other UK retailers and is likely to accelerate the end of the hard discounter space opening programme,' Bernstein said.
All eyes will be on the sleepy town of Chatteris next week, therefore, and the start of what could be an exciting new chapter for the UK's largest retailer.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine
