LONDON, March 10 Tesco, Britain's
biggest grocer, will on Monday launch its first major push on
prices under new UK boss, Chris Bush, as it battles to win back
market share lost to rivals.
The company said on Sunday that its new "Price Promise" will
compare at the tills the overall cost of a basket of branded,
own-label and fresh food against the same or equivalent products
from Wal-Mart's Asda, the No.2 grocer, third-placed J
Sainsbury and No.4 Wm Morrison.
If the comparison shows the Tesco basket would have been
cheaper elsewhere, a coupon for the difference in price, up to a
maximum of 10 pounds ($15), will be issued automatically when
customers receive their shopping receipts.
Online shoppers will receive their coupons by email.
"We're the first major retailer in the UK to compare our
prices against the branded and own-label prices of our
competitors and give customers an automatic coupon for the
difference," said Bush, who took over the running of the British
business from group CEO Philip Clark in January.
Tesco has tested the till-based scheme in Northern Ireland.
Previously, customers were able to receive Price Promise coupons
by logging on to a web-based scheme.
The new Price Promise will also cover promotions including
"half price" and "buy one, get one free" offers at Tesco and at
Sainsbury has operated a similar "Brand Match" scheme for
about 18 months, but this covers branded products only.
Asda has a "Price Guarantee" that offers to refund customers
the difference, via a voucher, if an online price-comparison
website does not show that their shopping is at least 10 percent
cheaper than it would be at a rival's.
PRICE ISN'T EVERYTHING
Shore Capital analyst Clive Black said in a note last week
that Tesco's competitive issue in Britain was not only about
price and value.
"While they are variables that are certainly relevant, they
also sit alongside brand perception, store service levels,
product quality and the attractiveness of its outlets," he said.
The new pricing initiative is Tesco's first since it
launched its "big price drop" in September 2011, dubbed the "big
price flop" by analysts.
Last April Tesco launched a 1 billion pound ($1.5 billion)
turnaround plan for its home market in response to its first
profit warning in 20 years.
In January Clarke said that the company was "back on form"
in Britain with underlying sales growth of 1.8 percent in the
six weeks to Jan. 5.
Though that was Tesco's strongest sales growth in three
years, it was against a weak performance in the previous year.
With inflation running at more than 2 percent, it still
represented a volume decline.
Industry data for the 12 weeks to Feb. 17 showed that Tesco
lost market share in the weeks following the horsemeat scandal.
The scandal, involving a number of retailers, erupted in
January when tests carried out in Ireland revealed that some
beef products also contained horsemeat, triggering recalls of
ready meals and damaging confidence in Europe's complex food
However, market researcher Kantar Worldpanel said that
Tesco's dip in market share had more to do with the grocer
promoting heavily in the same period of the previous year.