Blog: Tesco launches latest fuel offer to drive sales
Dean Best | 23 July 2012
A handful of household FMCG brands are central to Tesco's latest offer on fuel, which it claims offers consumers "unbeatable" savings.
UK retailers have used discounts on fuel in recent months to entice consumers away from their competitors and today (23 July) the country's largest grocer announced its latest initiative.
Shoppers will receive a voucher that gives them 10p off a litre of fuel if they buy:
- Any four selected Heinz products (choice of mayonnaise, tomato ketchup, salad cream, baked beans) for GBP9
- Any two selected Andrex Toilet Roll 9 pack for GBP10
- Any two selected Robinsons Double Concentrate 1.75 litres for GBP7
- Nescafe Original 300g for GBP7 or Gold Blend 300g for GBP8
- Fairy Non-Bio Powder 72 Wash 5.75kg at £14
Tesco, which is looking at ways to revitalise sales in the UK after challenging few quarters, said the deal offered motorists "an incredible saving" of 50p per litre of petrol.
"Most significantly, up to five 10p per litre vouchers can be used at the same time at our petrol filling stations," Tesco UK marketing director David Wood said. "This means Tesco customers who take full advantage of this promotion will save 50p on every litre of fuel they buy on our forecourts and they will enjoy the lowest fuel prices by far anywhere in the UK."
Shore Capital analyst Clive Black said the offer shows "there is some life and initiative at Tesco UK" after a period of "stabilisation" following the consecutive quarters of like-for-like sales.
However, Black was unsure about the potential impact of the promotion. "At headline level this is a quite telling discount. However, its appeal will be interesting to monitor and we stress its rather narrow timeframe. Most of the products participating in the discount have a reasonable shelf life and so will fill the cupboards and cabinets of participating households for sometime, unless one has an army of children keen on Robinson's cordial, a heavy wash load or persistent bowel problems," he wrote in a note to clients today.
"That said, there will be households and maybe small charity organisations and the like that do buy such products in bulk and this discount will no doubt be of particular interest. Any bringing forward of such products may lead to a somewhat fallow period down the line for retailers and suppliers alike of these products, unless that is there is surplus stock that needs to be cleared in the supply chain and Tesco is taking advantage of such a position."
How could the competition react? Sainsbury's, which matches the prices of brands at Tesco and Asda, even when the products are on promotion, said its Brand Match scheme does not include fuel offers.
"Brand Match does not take petrol promotions into account. We believe that it's the best tool in the market checking the price of over 14,000 branded products in seconds," a Sainsbury's spokesperson said.
In the weeks ahead, the major retailers are set to provide an update on trading. It will be interesting to hear what they make of their rivals' promotional tactics.
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