With the new chain, Tesco has to walk a fine line, challenging the discounters while avoiding cannibalization of its main store brand with lower prices.
Jack's which will roll out nationwide by the end of 2019, are named after Tesco founder Jack Cohen and have promised to be the "cheapest in town".
Chief executive Dave Lewis opened the first store in a mothballed former Tesco outlet in the small Cambridgeshire town of Chatteris yesterday, with another 10 to 15 launches in the pipeline.
In addition to Jack's products, the stores will stock some familiar grocery brands and a range of general merchandise.
Just as Amazon.com Inc's expansion into grocery adds to competition, Tesco is starting Jack's out as a traditional brickand- mortar operation with no online shopping.
Jack's will operate a low-cost business model that is created to keep costs low and prices down.
Competition at the top of the United Kingdom supermarket sector has continued to intensify since the initial price wars to attract customers and protect market shares in the stampede to the discounters.
The latest industry figures produced by Kantar Worldpanel show market share growth for all the major grocery brands in the United Kingdom - a outcome of essential spending holding up well amid a BBQ summer.
"Tesco will have to find a way to attract customers from the likes of Aldi, Lidl and Iceland, rather than convert existing Tesco customers into discount shoppers through brand association", he told the news agency Reuters.
"I wanted to see the different bargains that they've got and to have a good look", she said.
Its fitting that today, we mark the beginning of Tescos celebration of 100 Years of Great Value by launching a new brand, and stores bearing his name: Jacks.
"However, we also forecast very strong earnings per share growth out to full-year 2021", he pointed out, adding that the supermarket had scope for further deleveraging and "indeed we can not rule out that Tesco may follow where Morrisons' has led, in exploring recurring special dividends in time".
The tie-up between Tesco's two nearest competitors, which regulators said would be scrutinised in depth, is also driven by the rise of the discounters. "Great-tasting food at the lowest possible prices with 8 out of 10 products grown, reared or made in Britain".