The Tesco tanker is by no means turned around, there remains a lot of work to do. The recent 0.1% lfl gain was solid enough but did it represent enough of a ‘green shoot’ to justify the recovery plan was starting to work?
News of a new pricing initiative by Tesco came via Twitter, it seems Tesco are trialing a big push of their price guarantee within Northern Ireland, encompassing branded products but crucially, incorporating own label products into the mix too…
Comparing own label can be a risky business though. Faitrade Bananas vs standard bananas? Whilst there is no differential in terms of the taste or product, there is a difference in the buying terms so are these equal? Meat content in Lasagne can vary so is that a fair comparison?
Similarly there is a trade off between quality and price, look at the Aldi market share and recent growth (34% year on year), price and price alone isn’t enough to differentiate. Asda found this out which prompted their relaunch of own label product to Chosen by You. Can you really compare own label products properly?
Asda do offer an own label matching service within their price guarantee but typically there are several caveats, which apply to Tesco around weight and origin. However the Asda scheme is operated by ‘My supermarket’ who do the comparable own label matching.
Tesco are relaunching and advertising this initiative within Northern Ireland first, their terms & conditions point out that Morrisons don’t have stores in Northern Ireland so own label products won’t be compared.
It’s notable that the trial doesn’t extend to Southern Ireland where Tesco Ireland exist, it’s only Northern Ireland initially which seems indicative that Tesco will take the successes back across the water to the rest of the UK, rather than heading south.
The nuts & bolts of the scheme are broadly the same as the disastrous ‘price check’ scheme, where savvy shoppers were able to get vouchers of up to £100 buying specific products that were significantly cheaper at Asda and comparing these items online. This led to an embarrassing climbdown and a limit of £20 on vouchers which was later reduced to £10 when ‘price promise’ was launched.
The key difference with this Price Promise is the use of instant voucher technology at the till, it’s also the first time it’s been launched and backed with PoS in store.
This limit remains in place on the relaunched Price Promise site, there is only a maximum voucher value of £10, additionally the vouchers are printed from the standard reciept printers, there are no Catalina vouchers like the ones Sainsbury’s and Morrisons offer.
Price Promise was launched in June 2012 and was notably low-key, there has been no PoS to support a relaunch in store and the scheme was only open to Clubcard holders at one stage.
The key difference in Northern Ireland is that vouchers are printed instantly at the checkout informing the customer how much was saved (or could have been saved elsewhere). Presumably there are no restrictions bar the minimum 8 items caveat.
It’s likely there will be a wider rollout across the UK in the new year but it’s interesting that Tesco have revisited the price guarantee arena, clearly their plans aren’t having enough traction without the weight of a well known price comparison site.
Tesco were at the forefront of retail in the 90’s and indeed the early ‘noughties’, but since then, they’ve become ‘me too’ and are playing catch up, imitating competitors and still trying to be all things to all people.
Customers aren’t stupid and know fair pricing and promotions better than ever. The real proof of the pudding will be in the eating with regards the latest incarnation of the Tesco price guarantee site.
Is it a game changer? Or is it Tesco just getting involved (again) in price comparative sites because the competition are?