Tesco has launched its latest attempt to stem its market share losses to the discounters with a promise to price match Aldi on hundreds of everyday products.
The UK’s largest grocer will price match with Aldi on various meat and fresh produce items, as well as own label lines in other categories such as dairy, bakery and frozen. Some branded products will also be included such as Warburtons Toastie sliced bread, Silver Spoon sugar, and PG Tips tea bags.
Tesco stated that it will check prices in Aldi stores twice weekly. Products included in the campaign will have a red ‘Aldi Price Match’ bubble displayed at the shelf edge and will be called out online. A full list of around 300 products included is available on the Tesco website.
Alessandra Bellini, Tesco Chief Customer Officer, said: “Our customers tell us they want the most competitive prices on the things they buy regularly. This new campaign will help time-poor and budget savvy customers get Tesco products at Aldi prices on products that matter to them”.
An Aldi spokesperson hinted at a response, raising fears of a renewed price war in the grocery sector. They said: “Our promise to our customers is they will always pay the lowest prices on every product we sell. It’s why millions of shoppers continue to switch to Aldi from our more expensive competitors, including Tesco.”
Tesco’s previous price-matching scheme, which focused only on branded items, was discontinued in 2018.
Data released this week by Kantar showed all the Big Four grocers were continuing to lose market share. Tesco still controls 27.2% of the market but Aldi and Lidl now have a combined 13.7% – more than treble the level of a decade ago.
Thomas Brereton, Retail Analyst at GlobalData, commented: “This move represents a clear determination from grocery market leader Tesco to stem the number of customers defecting to its growing, price-orientated competitor Aldi. By targeting core products (including eggs and sliced bread) and naming Aldi directly, Tesco are hoping to break down the widespread image that the discounters offer a significantly cheaper basket – and reduce the number of customers that switch as Aldi continues its ambitious UK store expansion plans.
“Going after Aldi’s low-price image directly is an aggressive but shrewd move from Tesco; excluding Lidl, Aldi’s shoppers rated price when buying groceries higher as a factor than any other major supermarket. This campaign, combined with Tesco’s other price initiatives – such as its Fresh 5 offer (a format adapted from Aldi’s Super 6) and its revamped Clubcard scheme (Plus) – suggests that Tesco plans to again use its scale to maintain price competitiveness in 2020.”
NAM Implications:
- Begs the question why Tesco do not price match against all 1,750 lines, branded and own label…?
- …and take the step of designating a discounter aisle/s in store…
- …to really highlight the initiative…
- …and thus determine what really makes a difference to Aldi/Lidl shoppers.
