Tesco expand their Aldi price comparison
13 September 2021
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Key Takeaways
1) More lines on the Tesco price match versus Aldi for the winter months ahead.
2) There are often adjustments to the various lines, but to advertise an expansion is bold and products featured are right across the store.
3) We have seen various changes in this 'war' between the two retailers, alongside Sainsbury's imitating the scheme earlier this year.
Movement from Tesco as they expand their price comparative versus Aldi to further lines, with a high number of core lines in the mid tier now featured.
You'll remember that the first iteration of this campaign did indeed feature the value tier brands and their equivalents in Aldi. This made it somewhat difficult for Aldi, who found their mid tier products being equalised versus Tesco value tier products.
The war continued with Aldi then imitating Tesco mid tier packaging in Frozen Foods (without price comparatives) before Tesco then rebadged their value tier in Meat (presumably having got to a tipping point) as mid tier and took out the value tier (essentially) in Steak, Mince and other Beef products.
In addition, brands were added to the comparatives, recognising that Aldi, like Lidl before them, are often putting numerous brands in the special buys area and this has only risen with the issues around supply chains and non-food arriving to the UK.
So Tesco retaliated and regularly added brands to the comparative to put pressure on the supply base not to sell in cheaper to the discounters versus themselves. (which is in no way a strategy, in any case).
The matching of brands in Tesco and Aldi (where there is crossover on the core range) is common sense, one can argue about the quality and matching up of own label forever. However, brands are brands and save for a few weight and pack size differences, there is no way that Tesco should ever be more expensive than Aldi on any of these lines.
Which takes us back to when Dave Lewis first took over, and their seemingly odd choice of products that were part of a brand guarantee price scheme, the brands were bafflingly random but they were all stocked by Aldi (at the time).
Alongside the expanded price matching scheme, Tesco continue to work value hard with clubcard prices now the only way to access any promotional savings as a Tesco customer.
In turn, this expands the data reach and the quality of insight that the customer will be sharing with Tesco.
Meal deals and other value based deals are all featured on Clubcard prices, with a number of such deals located in aisle which helps the 'permanent' value based customers who will trust Tesco that they'll have a deal or two for them, too.
The wider scheme via Tesco, featuring own label mid tier products (for the first time in any meaningful way) means that the pressure is piled on Sainsbury's to expand their scheme further to include similar products.
Which is not what they want, at all, given the margins and their mid tier products generally enjoying a price premium versus rivals.
Given the Sainsbury's tilt on quality on their specific price match scheme, it's noteworthy also that Tesco have come back around with another series of pledges on quality. Their 'seal' is noted on signage, especially in Produce and does a job to underline their sourcing and the like around freshness and quality.
They've pushed Finest a little more too in stores, designed to boost the margins, given customers are saving across the store.
It can never just be about low prices, which is of course, what we already know about discount retailing.
More to come on this front, but interesting times nonetheless, Tesco said they felt the price comparative work was strategical as it was in place for such a long time but would make minor changes.
Interesting to see what else they do with it, but like many things of theirs, it's consistent and executed ever so well at the same time.
Next up - we're reviewing the changes at Asda
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From the Grocery Insight newsletter archive, first sent to subscribers on 13 September 2021. Steve now writes at read.groceryinsight.com. See also the blog archive and briefings.