Tesco's agressive price cutting in Britain

By: trademagazin Date: 2009. 03. 02. 04:47

The retailer was planning to cut prices on 3,000 lines, from fresh meat to baby food, stepping up the pressure on the rest of the industry as it heads into the Easter trading season. The cost of the cuts will run into tens of millions.

Britain's biggest supermarket chain has
embarked on some aggressive pricecutting to attract cash-strapped
consumers, dropping the price on hundreds of frozen food lines to £1.

Richard Brasher, Tesco's commercial
and marketing director, who has dubbed the latest round of cuts the
"deep freeze" campaign, said the popularity of frozen food
was on the rise as millions of customers worried about how they
could make ends meet from month to month. Frozen food, he said,
enabled them to stock up when they had the cash.

Earlier this month, Tesco said it
would add another 100 lines to its discount brand range as it tried
to see off the hard discounters by offering cheaper branded goods in
its own stores.

Tesco launched 350 discount brand
lines in the autumn in an effort to give shoppers more choice than
just their value and standard ranges, as the price of the discount
brand range sits somewhere between the two.

But the range has met with scepticism
in the City, with some analysts arguing that Tesco is making its
offer too complicated and more expensive than competitors.