Tesco launched its Price Promise scheme in the UK in March

Tesco launched its Price Promise scheme in the UK in March

Tesco has launched its Price Promise comparison scheme in Ireland as it looks to grab back some market share from discounters Aldi and Lidl.

Tesco's Price Promise launched in Ireland late last week and compares the overall cost of over 1,000 comparable groceries within a basket in Tesco against products from Aldi or Lidl. If the cost of the comparable groceries are cheaper with either of the two discounters, the retailer will issue a voucher for the difference, up to EUR10 (US$13.80).

Tesco launched its Price Promise scheme in the UK in March. The promotion works across both branded and own-label products and is an extension of its trial of a point-of-purchase voucher system in Northern Ireland. In Ireland, the scheme will cover own label and "lesser known" branded grocery products, the retailer said.

The UK scheme uses Asda, Sainsbury and Morrisons as its reference points. However, in Ireland, Tesco is targeting Aldi and Lidl, the two discounters the retailer has been losing ground to.

According to the latest market research data from Kantar Worldpanel, Tesco's share of the Irish market fell to 26.8% in the 12 weeks to 15 September, down from 28.7% in the same period of the prior year.

In contrast, Aldi's share has grown from 6% to 7.4% and Lidl's from 6.7% to 7.5%.

Shore Capital analyst Clive Black said of the launch: "Quite whether the specification of 'Everyday Value' matches the private label offers of Aldi and Lidl is a mute point. We sense that one of the key drivers of the deep-discounters' popularity in the UK & Ireland is that they offer better value than entry price lines of the majors because the specifications are higher, closer to mainstream private label brands."

Earlier this month, Tesco revealed a sharp drop in first-half earnings. Pre-tax profits fell 23.5% to GBP1.39bn (US$2.25bn), while trading profit was down 7.6% on last year, reflecting the effects of "challenging" economic and trading conditions in Europe.

Tesco said in its results release that overall economic growth had seen further declines in some of its largest markets, such as Ireland and Poland, with consumer confidence still tracking at historically low levels.