More Tesco - larger labels.
3 October 2017
COMING UP
Now: Tesco - larger labels
Soon: What about Wilko?
Later: M&S - Did the lack of a sale impact food?
Look closely..
No, not at the emergence of Toffee Apples at the end of September, or the Halloween packaging.....
But the size of the price on the Tesco shelf edge label.
It's much larger than typical and is representative of Tesco pushing along with their strategy, highlighting prices confidently as they continue to enhance their value credentials....
We have seen this strategy from Tesco recently, as they've started to move the dial on pricing by highlighting own label in fixture more prominently.
Alongside this, within a core fixture of Shampoo (e.g.) where the price is far lower for own label (90p vs. £2+ for brands) Tesco were putting the 90p price in a larger font and placing the own brand at eye level and above.....
Suddenly they've improved price perception to a customer by moving the location of own label and highlighting that price in a larger font.
Yet they've not invested a penny in the price...... Simple? The best things in retail always are.
Notice in this fixture that the 'hi/lo' branded product inside the Tuna assortment, however the main eye level product is own label. Occupying the middle ground, quite literally inside this bay.
The price on the label is also larger, we have seen this in other fixtures for the own label... Where Tesco opt to highlight own label and the lower price too.
Very impactful, the customer looking at the fixture sees the lower price for own label (and the promotion) too in the larger font.
Stronger price messaging within Passata too, larger price for their price point and impactful for customers.
Although this is a typically own label dominated area, anything on price within Canned Tomatoes is positive for customers.
The Tesco value messaging is strong, their ends are much clearer since their changes to the promotional package in the Summer.
Gone are the days of yellow/red signage with bubbles everywhere, it's yellow/black and simple mechanics / price messaging to clearly show the customer what is going on.
Very impressive.
However.
In the last recession (great recession etc) B&M, Home Bargains and co got real traction by offering branded groceries at lower prices, sometimes on a fluctuating basis (I.E. unsure what we'll find in there this week). Coffee particularly given their lower prices and the hi/lo nature of the category at large.
Tesco have worked hard at their Coffee fixture, prioritising their own label Coffee over Nescafe in the fixture, which, with a larger price label when it lands - enables the customer to clearly see own label and the lower prices too.
However by that token. The customer will also see higher prices in fixture, such as this from Nescafe. A mere £8.98 for a 275g refill pack of Gold Blend is crazy.
Of course inflation and commodity prices play a part here, driving the price northwards, but why do Tesco (and others) range this line?
Not ranging it won't force customers to shop elsewhere, they're unlikely to notice anyway should it not be ranged here. Plus given the price point, any discount would likely take the product to £6 (£3 off)...
Worthwhile?
No. The brands have to work harder, it's clear given the focus that Tesco put in to own label, they can control quality, branding, location on shelf and now the font size in which prices appear too.
It's not about branded Coffee at high unit prices.
It's about own label in the main, and a key reason for Tesco performing so well is sorting value out in store.
Larger fonts for products on the shelf labels is one thing, but it points to a business that is happy to highlight their prices in a big way - given the level of work that has gone in to simplifying value.
All eyes on their results Thursday, scarcely believable given what Dave Lewis inherited that they're in a position to talk about price in such a way. All credit to them for their work at the shelf edge.
From the Grocery Insight newsletter archive, first sent to subscribers on 3 October 2017. Steve now writes at read.groceryinsight.com. See also the blog archive and briefings.