Magazine article Marketing

Tesco's Cut Price Offer Turns the Heat on Rivals

Magazine article Marketing

Tesco's Cut Price Offer Turns the Heat on Rivals

Article excerpt

Tesco's cut price offer turns the heat on rivals

Supermarket Tesco's surprise move to slash prices has confirmed its reputation as the market leader in tactical PR - and edged the industry closer to a price war.

The decision to cut prices by up to 50% on more than 500 own-label lines for the month of August has brought it valuable free publicity and could attract large numbers of new customers from rivals - just as the recession hits grocery sales.

The initiative is purely to "get more customers through the doors" and to open new customers' eyes to the quality and value for money of its own label products, says Tesco. "It certainly isn't our intention to spark a price war".

But if Tesco succeeds in attracting new customers, rivals will be forced to respond with equally aggressive tactics - especially as sales growth is grinding to a halt anyway. According to Nielsen grocers experienced nil unit sales growth last June, compared to 3% a year ago. …

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