UK online retailer Ocado has launched a fresh price offensive against Tesco that includes brands and the retail giant’s own-label lines.
The campaign, an extension of its existing ‘Tesco Price Match’ scheme, pledges to beat the price of all comparable Tesco shopping baskets. Ocado is running the campaign on a trial basis in the north-west.
A spokesperson for Ocado told just-food the campaign has been launched “to offer a cheaper proposition than supermarket rivals and therefore encourage higher levels of growth”.
Ocado said the scheme offers an online tool that monitors “comparable groceries”, which include brands and “certain” Waitrose and Ocado own-label products.
The prices of the products are added together for a cumulative total, which is then compared to an equivalent order at tesco.com.
If the shop would have cost the customer less with Tesco, Ocado said it will provide a money-off voucher for the difference, “plus a little bit more”.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
Depending on the results of the trial, she added the campaign may be rolled out nationally in a few months time. The spokesperson said it would wait until the results of the trial are in before deciding whether to roll the scheme out to target other retailers.
Ocado co-founder Jason Gissing said: “Now with our Low Price Promise we’re going one step further by giving customers a money-off voucher if we don’t beat Tesco on comparable branded and own label goods. As the name says, this is a promise to our customers. We won’t just match Tesco prices. We’ll beat them.”
In June, Ocado revealed a set of mixed half-year results, with sales up but flat pre-tax profits and a fall in operating profit. While some analysts tried to look for positives, the numbers were described as “poor” in some quarters in the City, with concerns over the outlook for Ocado.
In particular, Shore Capital analyst Darren Shirley noted: “It will remain some years for Ocado to deliver meaningful profits, should that outcome ever occur.”
Today, however, the spokesperson said the retailer would not comment on profits.
Click here for a look at why analysts are surprised Ocado has targeted Tesco again.