Tesco focuses on promotions

By: Trademagazin Date: 2024. 05. 13. 11:22

Ken Murphy, CEO of Tesco, has outlined the company’s plans to use promotions to win back customers from private label products over the next 12 months, leveraging decreasing inflation. The rise in prices previously enacted to protect margins and manage rising costs now provides an opportunity to enhance market share through discounts and promotional offers.

Over the past two years, private label products have gained popularity as consumers sought cheaper alternatives due to higher living costs. Data from Kantar indicates that the gap between supermarket own brands and branded competitors began to widen in February 2022, with the largest difference observed in March of the previous year when own brand sales grew by 15.7%—twice the rate of branded products.

Fraser McKevitt, Kantar’s head of retail and consumer protection, suggests that this year, branded products are expected to achieve greater growth than own brands, partly due to increased promotions. This trend is expected to continue for at least another year, providing suppliers an opportunity to regain previously lost volume.

These measures are expected to not only benefit Tesco but also other consumer goods companies, offering new opportunities to restore competitive markets and rebuild consumer confidence.