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May 13, 2019

Tesco ‘culls brands to prepare for fight with discounters’

Tesco, the UK's largest supermarket group, has been linked in UK newspaper reports with a product reduction strategy.

By Leonie Barrie

Reports in the UK media suggest that Tesco, the country’s largest supermarket group, is ‘clearing the shelves’ to make space for products which will help it compete on price with discounters such as Aldi and Lidl.

A report in London-based The Times newspaper said Tesco chief executive Dave Lewis is to “sweep” 20% of its 40,000 products off the shelves.

It reported that Andrew Yaxley, Tesco’s chief product officer, told suppliers last week that the retailer plans to slash its range further as it fights back against the discounters.

The Times reported that, since taking over in 2014, Lewis has more than halved the number of individual products stocked by Tesco across its stores, from almost 90,000.

Tesco has a 27% share of the UK supermarket industry but in an extremely competitive marketplace it is aware of the threat posed by the discounters, especially in the uncertain economic climate created by Brexit, the UK’s departure from the European Union, which may encourage people to tighten their belts when doing the weekly shop.

Last week Tesco announced it is launching its lower price Jack’s products in mainstream stores.

It said a range of own-brand products from the lower cost store brand will appear in its mainstream retail outlets this month.

Jack’s, named after Tesco founder Jack Cohen, was launched in late 2018 and is widely seen as Tesco’s response to the success of discount supermarkets.

Of the 1,800 products available in the Jack’s range, the food products selected for Tesco stores will be priced between GBP0.59 (US$0.76) and GBP1.07.

Tesco has also reduced the price of “hundreds of products” as part of its 100th anniversary celebrations.

Chief customer officer Alessandra Bellini said the move was designed to “help customers get even better value on their weekly shop”.

When contacted by just-food for confirmation of The Times‘ story, a Tesco spokesperson said:  “We range over 40,000 products and we continually look for ways to provide customers with the best range, quality and value. Any changes to our range are informed by customer feedback and are focused on reducing duplication, improving availability, and making it easier for customers to find the products they want.

“A main focus for the range optimisation work in 2019 will be on removing duplication, introducing innovative new products and reducing the number of pack sizes, for example in a category where we currently stock 250g, 500g, 750g and 1kg variants.”

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