Tesco has said it will close down seven of its Jack’s stores, while the remaining six branches will be converted into Tesco superstores.
The move will affect 130 jobs but Tesco said it will try and find alternative roles for the staff affected.
Tesco also said that meat, fish and deli counters at 317 store sites would be also be shut down because of changes in customer demand.
It launched Jack’s in 2018 to tackle the threat from rivals Aldi and Lidl.
Tesco said that Jack’s had enabled it to bring in new customers from other supermarkets.
Jason Tarry, chief executive of Tesco UK and Ireland, said: “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,” he added.
Chief executive Dave Lewis claimed that Jack’s – named after Tesco founder Sir Jack Cohen – would be cheaper than Aldi or Lidl.
Jack’s stores sold 2,600 products – far fewer than the 35,000 carried by a Tesco supermarket – with 1,800 branded “Jack’s”.
In the first six months after the launch, Tesco had planned between 10 and 15 Jack’s stores for new locations, next to existing Tesco stores, and a small number of converted Tesco stores but a total of 13 were built.
The seven sites which will be closed are in Hull, St Helen’s, Walton, Castle Bromwich, Middlewich, Barnsley and Liverpool North.
The sites which will be transferred to large Tesco stores are in Chatteris, Immingham, Edgehill, Rubery, Sheffield and Wakefield.
Staff working on the meat, fish and hot deli counters listed for closure in 317 of Tesco’s stores will also be offered different roles.
The supermarket chain said the changes will “ensure” Tesco remains “focused and competitive in a fast-changing market”.
“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,” Mr Tarry added.
Tesco saw sales soar over Christmas and forecasted strong full-year profits in January. It said it expects annual income to hit the top end of forecasts at £2.6bn. Tesco’s Christmas sales in the UK rose by 0.3% compared to the previous year and were 9.2% higher than the pre-pandemic festive period in 2019.