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Tesco 'to tailor deals based on income'
The supermarket’s new pricing strategy will mean products and discounts are determined by the affluence of families in the surrounding area.
Image: Tim Ireland - PA Wire
Tesco is to start customising its in-store products and promotions according to the income of local families, retail magazine The Grocer is reporting.
As part of the strategy, value-brand products will be promoted more heavily in poorer areas, while the supermarket's Finest range of goods will fill more shelves in richer neighbourhoods. Stores will also tailor their promotions and discounts according to what they believe will suit customers in each particular area/region.
The supermarket has stressed that there will be no variance in the price of non-discount goods across its branches.
However, given the vast amount of deals on offer in Tesco stores, it's clear that a shopper in a more affluent area might end up paying significantly more for their basket of goods than someone in a less well-off part of town.
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Is it a good idea for Tesco to tailor deals and products based on local shoppers' incomes?
- 22 %Yes - more supermarkets should do this
1,649 votes - No - it should offer the same deals in all stores
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Tesco squeezed at both ends
While the supermarket already tailors its products based on the shopping habits of its Clubcard members, this takes the strategy to a new level.
Perhaps one of the reasons behind the controversial move is the fact that its rivals have been eating into its share of the market.
Discount chains like Aldi and Lidl have been enjoying double digit sales growth in recent years, while stores like Waitrose and Sainsbury's have been applying pressure at the higher end of the market.
Make no mistake: the supermarket giant is feeling the pressure, having issued its first profit warning for 20 years at the start of January.
The Grocer reports that Tesco will initially trial the strategy in around 300 of its stores.
So what do you make of the move? Do you think it provides a better shopping experience, or would you expect stores to have a uniform offering regardless of where they are situated?
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235Comments
23/01/2012 23:11
Sorry to Tesco,Sainsburys,Waitrose & Morrison's.
They have all lost the way.
I had a bad year last year with no job etc but had been going mainly to Lidl and then Aldi and also Asda for anything else.
I am back working but LIDL & ALDI will be my main port of call.
Quality and very cheap.
Try them out its stupid staying away if you think your too posh then good! Stay away!
Most of the cars in the Lidl and Aldi car parks show that its a good mix of people shopping in these stores.
I give them 10/10
Tesco you have passed your sell by date and toooooo expensive!
23/01/2012 19:00
Tesco need to tackle its problem with incorrect pricing. ie: £1 each or 3 for £5.
Thats been a problem for over a year now.
And removing its out of date offers from the shelf edge.
And the lines at the checkout - when only a third are manned.
And the Nescafe Alta Rica that goes up and down a £1 alternate weeks.
And the full price sliced bread for sale thats out of date tomorrow.
And the 1kg packs of Tesco Crunchy Nut Cornflakes thats more expensive than 2 x 500g packs.
And on and on .....
24/01/2012 08:25
I've already noticed at the local Tesco Express they are selective with their offers and don't stock the cheaper brands so that you have no choice but to buy premium products instead.
On the otherhand I find it very patronizing and manipulative of Tesco to decide what's best for the customer. Shopping is about choice. I will be boycotting Tesco and get my groceries elsewhere. No-one like to feel they are being taken advantage of whether we are in a recession or not and we are all capable of deciding how much we want to spend on our groceries.
Every little helps themselves!
23/01/2012 18:49
23/01/2012 21:20
23/01/2012 18:48
Tesco have shot themselves in the foot with this one - only the so-called poorer neighbourhoods will be shopping there from now on - nobody is going to pay more than the next person for their shopping. Sainsbury's, Aldi, Morrison's ....... you name it.... will do very well out of the ex-Tesco customers!
24/01/2012 01:33
I must be one of them poorer folk, living in an affluent area. Tesco no longer stock the pizza and jelly I went in there for. So I now shop at Lldl, Sainsburys and Morrisons. They all beat Tesco hands down, Lldl on the veg, Sainsburys have cream cakes and fresh bread to die for, and Morrisons because its so clean and the staff fantastic, makes me think of those old farmers markets...
I for one have binned my clubcard!, I switched using there fuel pumps awhile back and I shall never give up and never surrender.
I wonder what that security gaurds does now that he can no longer follow me and the wife round shop?
24/01/2012 07:27
24/01/2012 09:07
In my area both Tesco and Sainsbury’s have been buying up all available land to stop Asda building a store because they know the competition will force them to reduce prices and hence hit their profit margins. This has been going on for years and it means we have to pay inflated prices to shop here or go nearly 20 miles to the nearest Asda. For instance, petrol is 4p a litre more expensive here than driving 20 miles to shop at Asda.
I’m not surprised Tesco are suffering, their customer service is appalling, I had a Tesco credit card for years purely to get extra points, the account was always paid on time by Direct Debit. Recently I changed my bank account and notified them in plenty of time, but they charged me £12 because they tried to debit my old account due to their incompetence. I complained and got it back but the hassle was unbelievable, they also cancelled the increase in my credit limit. I told them to shove their Credit Card where the sun doesn’t shine and will not be shopping at Tesco again.
24/01/2012 00:39
The title of this piece is misleading! To tailor prices to economic areas infers ALL prices, not just the upper and lower! Pushing the cheap options on the poor is insulting, and the expensive will only ever be bought by those who feel they can afford it.
Taking the prices down, across the board, in a poorer area is tailoring, choosing what you think the locals should be buying, is tinkering and bloody offensive!!!
24/01/2012 04:12
23/01/2012 18:51
Tesco is the flagship of greed driven profit obsession in Britain today. Its business practices are deplorable and the remuneration it pays to its workers compared to the bonuses paid to top executives is a disgrace. The company has been allowed by poor government policies and by getting snouts into troughs to circumvent planning laws in order to destroy the infrastructures and retail trade of towns and cities across the United Kingdom. It epitomises all that is wrong with this malevolent uncontrolled and unmanaged capitalist society.
24/01/2012 04:40
sadly I find it insulting of Tesco to suggest that if your poor you should have a lesser quality of food, I cannot for the life of me work out why they have the differences in food prices. Surely they could slightly raise their lower prices and reduce their higher prices, and just sell the best food to everyone at a fair price. I would suggest to Tesco be careful with what sounds to me a little like discrimination to the poor, whilst fattening up the rest of society. Shame on Tesco, I only shopped at Tesco for 30 years, however I stopped shopping there 20 years ago when even in those days Tesco was loosing it's way, I sadly think Tesco is going to have a bad couple of years if they don't grow up and stop pontificating to us all. I will continue to shop at Asda, where I consider I save a great deal of money over the year even on its TOP range.
23/01/2012 22:07
Tories', Labour or Lib Dem, its the country over & over...Tesco,Sainsbury's or Morrison's...Who cares about the People that actually support them, its all about how much we can actually STEAL ! ! Back from them ! ! ! Its Really, & i mean REALLY time for the people of Great Britain to say, "ARE we getting the best deal from any company ?" As a nation we once ruled most of the planet as we then knew it, we had inventors,creators,industry, pioneers & pride, but we are now seen as the laughing stock of Europe.
Come on People of Britain, we all live here together on a VERY small Island, Look around you, Look to your neighbours, Look at where you shop, Where you buy cars & fuel, Look at banks, Mortgages, Loans, Credit Cards, Gas & Electric prices, Council tax...do you feel you are receiving the best deal, when you see the profits these company's are making by basically Stealing your cash to fund massive bonus's for their directors & shareholders....One day very soon the bubble is going to burst when we all decide as a nation united, WE HAVE HAD ENOUGH ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !
Come on People of Britain, we all live here together on a VERY small Island, Look around you, Look to your neighbours, Look at where you shop, Where you buy cars & fuel, Look at banks, Mortgages, Loans, Credit Cards, Gas & Electric prices, Council tax...do you feel you are receiving the best deal, when you see the profits these company's are making by basically Stealing your cash to fund massive bonus's for their directors & shareholders....One day very soon the bubble is going to burst when we all decide as a nation united, WE HAVE HAD ENOUGH ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !
23/01/2012 19:02
It will be a bit hard to tell for me. My local Tesco in Failsworth, Manchester haven't yet realised that they need to have stock on shelves for retail to work. Every time I go in, half the fruit & veg shelves are empty, there is almost nothing on the bread shelves and the rest is just facing after facing of the same product (and brand). They are Morrisons best advert really.
I have also noticed that Tesco tend to put the price up of whatever product is on discount offer. About a week before it goes on discount. But for some reason the unit price never seems to go back to its cheaper rate after the discount. Rip off merchants really. Vote with your feet I say. Go somewhere else where you wont get ripped off!
24/01/2012 11:47
This idea is a blatant insult to everyone. Its socially divisive and I wonder if its even legal??? It stigmatises one and rips off the other!!!!! The (win-win) well off, would just shop in poorer area branches, of which there are plenty unfortunately, and who could blame them??.
The government have allowed Tescos to monopolise and profiteer, I wonder why??? If I am not mistaken the head of Tescos does hold a position (marketing?) in government!!! And were Tescos not on the list of 'tax avoiders' ?? Says it all really!! Its time for people to boycott Tescos totally, they have clearly got too big for their sickening greedy arrogant boots.
The government have allowed Tescos to monopolise and profiteer, I wonder why??? If I am not mistaken the head of Tescos does hold a position (marketing?) in government!!! And were Tescos not on the list of 'tax avoiders' ?? Says it all really!! Its time for people to boycott Tescos totally, they have clearly got too big for their sickening greedy arrogant boots.
24/01/2012 02:25
I never understood why so many people shop at Tesco. They are expensive by comparison to most of the other supermarkets, only top end places like Waitrose cost more. They don't provide better quality or more choice. Some of their deals are laughably obvious scams. Buy a half melon and get the other half free. Except a few feet away you can buy a whole melon for the same price as those two halves. Things labelled 'Special Offer' that aren't actually cheap, but Tesco thinks they're 'Special'.
24/01/2012 10:00
Tesco is like a virus that is infecting every town and city. We are told by them that they increase choice and create employment when in fact they do the opposite. They kill all competition thus limiting our choice, and by doing that they cause unemployment. Tesco is the most immoral corporation on the high street and the sooner people wise up and stop giving their money to Tesco the better.
23/01/2012 18:49
Greed prevents this giant from listening to their customers, they deservedly lost 33% of their business to the other big two supermarkets over the xmas period, and serves them right for dropping the double point club card deal and giving poor choices on their bargains.
Bring back double points and see their business get back to normal and stop being greedy!!
23/01/2012 21:22
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