Tesco launched its Big Price Drop initiative this week, which has cut the price of more than 3,000 products, such as bread, milk, fruit and vegetables. Tesco has also announced a move away from promotions, in favour of lower pricing; it said its mid-priced own-label products would be up to 50 per cent cheaper than brands.
The introduction of the Big Price Drop strategy to stores will mean an end to Tesco's double points offerings on its Clubcard loyalty scheme from the end of October - in order to fund the new campaign. Tesco will award one Clubcard point for every £1 spent - down from the two points for every £1 it now offers to customers. "Our customers have said what really matters to them at the moment, is the price at the till," said Sainsbury's. "We are cutting points in half but Clubcard members will get more from points when they exchange and everyone will be able to save money at the till." The retailer said the move follows research it carried out on 200,000 customers about how they were coping with the recession.
However, removing double Clubcard points would save Tesco £350 million, said a spokesperson from Sainsbury's. Rival grocer Asda said, "Whatever others do, they can’t trump our cast-iron commitment to be 10 per cent cheaper on a comparable grocery shop." Meanwhile, farmers have demanding that supermarkets fund the price cuts in such campaign. Tesco's rivals will follow the grocer's lead by making their own reductions shortly. (28 Sept)
© ESM: European Supermarket Magazine
