Magazine article Marketing

Tesco's 'Eat-In' Premium

Magazine article Marketing

Tesco's 'Eat-In' Premium

Article excerpt

The retailer is targeting a crowded dine-in market with its Restaurant Collection line.

When Tesco launched a discount range this time last year, it was probably not expecting a brisk recovery of its premium lines. Sales of its upmarket products, however, have risen sharply, prompting the supermarket to add Restaurant Collection, a selection of ready meals, to its Finest range.

The worst of the recession might have passed; people are certainly willing to pay more for their food, if the performance of Tesco's organic and Finest lines is anything to go by. With the start of this recovery, however, there may be an attendant danger that consumers will shun upmarket ready meals in favour of dining out.

Mark Ritson, associate professor of marketing and a columnist for Marketing, says the launch of the Restaurant Collection should not be used as a bellwether for the economy; it is instead a sign of greater consumer segmentation. 'It simply means a very small proportion of consumers want to pay a bit more for high-quality restaurant-style food at home,' he adds. 'Compared with the alternative - eating out at a restaurant - this is a classic recessionary product. It might cost more than other items in Tesco, but it's a third of the price of having the same meal on the high street.'

Ritson adds that the supermarket's launch of the ready meals is probably in reaction to increased sales in the premium sector. 'Tesco will have seen its premium customers paying more for restaurant-type products and national brands, and clearly thinks its Finest line can mop up this demand and maybe grow it a bit, too,' he says.

He does, however, question the retailer's marketing strategy of trying to push premium products while maintaining its positioning as 'Britain's biggest discounter'. The the result is mixed messages. 'Had Restaurant Collection been launched in 2001, I would have called it a total success, but these days there is less certainty as to whether Tesco knows what it is doing,' argues Ritson.

Tesco has launched the ready meals, which include Beef Wellington and Duck Confit, into a crowded 'dine-in' category. Earlier this month, Waitrose brought out a 'gastro meal kit' that promised to make cooking from scratch easier. …

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