Tesco has said it will price-match branded goods at the till in its latest attempt to undercut rivals. This is great for consumers, who should see the price of their weekly shop go down. But it could have unintended consequences for producers.
Tesco is trying to wrench customers away from its rivals Morrisons, Sainsbury’s and Asda after shocking financial results in which operating profits went down 55 per cent in the six months to August.
The focus on price shows Tesco trying to compete with new rivals, like German discount stores Aldi and Lidl.
The “brand guarantee” scheme means that customers will get the different deducted off their bill if it would have been cheaper at a rival supermarket. This works for shoppers in store and online.
It’s an extension of Tesco’s existing “price promise” scheme, where shoppers received a voucher if their basket of goods was available cheaper elsewhere.
The clue is in the name: the “brand guarantee” offer only applies to branded products. So the very cheapest, own-brand items are excluded.
