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.
The discount chain is named after Tesco's founder, Jack Cohen, who created the business almost 100 years ago.
Tesco plans to open between 10 and 15 branches over the next year in the United Kingdom, investing at least £20m (€22.5m) in the project and creating 250 jobs.
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.
He added: "For context, there are already over 1,300 Aldi and Lidl stores across the country and the two have a combined market share of 13.1 percent, so Jack's is clearly playing a longer-term game".
Tesco said that eight out of 10 Jack's food and drink products will be "grown, reared or made" in Britain and stores will stock an own-brand range, also branded Jack's.
"I think prices are good, I think the whole package Tesco has put together for Jack's is really good and I think it will be a really good addition to the high street".
The new discount brand is named after Jack Cohen, who founded Tesco in 1919, and the launch coincides with the company's centenary celebrations.
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It's more about the moment and the momentum, like you like to call it, is very important in the positive and negative way".
Unlike Tesco, Jack's will not have an online offering and customers will not be able to use their Tesco clubcard.
Data group Euromonitor International noted in a recent report that the German "discounters continue to shape the direction" of the United Kingdom grocery market.
Chief Executive Dave Lewis unveiled Tesco's new Jack's format on Wednesday, saying it would sell 2,600 essential items including 1,800 Jack's-branded products.
"Only time will tell as to whether Tesco's discount venture takes off".
Mr Lewis said that beyond the initial 15 stores, there is "optionality" for further outlets but it is "not a calculation we're now making".
While Lidl has steadily increased its sales in Northern Ireland, Tesco remains the dominant player in the grocery sector here, with a market share of 35.3%, according to the latest market share figures from Kantar Worldpanel.
"Plenty of people buy from Aldi and Lidl - around 60pc of all households shop in each of the discounters at least once a year", he said.