Blog: Dean BestAsda, Sainsbury's take aim at Tesco on Twitter

Dean Best | 23 September 2011

Tesco's overhaul of its promotional strategy has been the talk of the UK food industry for the last 24 hours and, amid the reaction, came withering responses from two of its key rivals.

In April, Tesco CEO Philip Clarke signalled that the country's largest retailer would act after a challenging 12 months for the business in its domestic market. Since then, trading conditions have worsened. Consumer confidence in the UK is on the floor and the likes of Aldi and Lidi are increasing sales while Tesco is seeing its market share eroded.

Yesterday, Tesco issued its response with an overhaul of its price and promotional strategy. The Big Price Drop included, it said, a move to cut GBP500m in the price of thousands of items and it secured headlines throughout the country.

Not everyone, however, was impressed. An Asda spokesperson took to Twitter yesterday to insist the Wal-Mart-owned retailer still offered better value. "One word. Yawn. We were 10% better value yesterday. We are today. And we will be on Monday. That’s why we have a price guarantee," the spokesperson said.

Sainsbury's also brushed off Tesco's claims. "This is classic smoke and mirrors from Tesco," the UK's third-largest food retailer said.

One part of Tesco's Big Price Drop is a change to its Clubcard loyalty scheme. Tesco has decided to move from two Clubcard points for every GBP1 spent to one point for each GBP1 spent.

Sainsbury's, however, said the move represented Tesco "giving with one hand and taking with the other".

"Removing double Clubcard points will save Tesco GBP350m. It is no surprise to us that Sainsbury’s price match policy, together with a stronger own brand offer, has forced Tesco to take this kind of action."

 


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