Tesco focuses on private label products

By: Trademagazin Date: 2023. 08. 16. 11:20

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The Tesco supermarket group is reducing the number of branded products in its basic goods category in its British convenience stores. This move is in response to the increasing trend of price-sensitive customers seeking cheaper own-brand products due to the ongoing economic crisis. The United Kingdom has faced a two-year crisis, prompting consumers to seek ways to save money. Inflation in the country was 14.9% in July, and there have been 14 interest rate hikes since December 2021.

Tesco, the UK’s largest food retailer, will replace over 50 basic products with cheaper, often own-brand alternatives in more than 2,000 of its Express convenience stores. Some of these substitute items will be priced at less than a third of the original product’s cost. The decision is driven by the fact that price-sensitive consumers are increasingly turning to own-brand products.

According to NIQ market research data released in May, sales of own-brand products in British supermarkets grew twice as fast as sales of branded products in 2023.

Tesco is also introducing a new line of own-brand products, including Tesco penne pasta and Tesco smooth peanut butter, both of which will cost half as much as the previously stocked branded items. The frozen Tesco peas will be nearly 40% cheaper than the substituted brand.

Tesco has announced that these new products will be delivered to stores by the end of August.