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Tesco has as expected unveiled its new discount chain called Jack’s that aims to tackle the rising threat posed by German rivals Aldi and Lidl.

The first store is in a mothballed former Tesco store in Chatteris, Cambridgeshire. Another outlet in Immingham, Lincolnshire also opens on Thursday.

Between 10 and 15 stores are planned for new locations, next to existing Tesco stores, and a small number of converted Tesco stores.

Chief executive Dave Lewis claimed that Jack’s will be the cheapest on the market. Jack’s stores will sell 2,600 products, with 1,800 branded “Jack’s” and eight out of 10 lines being made from Britain.

The fledgling chain is named after Sir Jack Cohen, the Londoner who founded Tesco in 1919 and whose motto to “pile it high and sell it cheap” is in keeping with the aim of the new venture.

Natalie Berg, retail analyst and founder of consultancy NBK Retail, said the launch of Jack’s was “very much a last resort” as Aldi and Lidl posed an “existential threat to Tesco’s business”.

As well as the discounters, Tesco faces being overtaken as the UK’s biggest supermarket chain by a combined Sainsburys and Asda.

The £15bn merger will be the subject of an in-depth competition investigation, the Competition and Markets Authority announced on Wednesday.

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