Tesco’s plan to compete with Aldi
July 18, 2008
Tesco is in the process of developing a range of own brand products which will place them in even more direct competition with Aldi, the German discount store.
The project, which is top secret, is due to be unveiled in the autumn. It aims to cut down prices of items in Tesco’s own brand range.
Tesco chief executive Sir Terry Leahy ordered the review after learning that rival discount retailers such as Aldi, Lidl and Netto were expanding at a faster rate than Tesco’s and the other three big supermarkets.
Sales at Aldi were up 21% for the last three months, due to consumers tightening their belts and are dealing with smaller budgets for their weekly shop as food bills have soared 9% over the past year (statistic from the Office of National Statistics).
Last month Tesco shares fell to their lowest level in 10 years, a fall of 2.5%. Mr Leahy said that Aldi were “having a moment in the sun” as consumers focused more on price.
Trends in grocery shopping are changing. The boom in organic foods has come to an end and price is now the most important factor to a shopper as they are buying more goods on promotion.
Tesco are hoping to bring down the cost of its standard range significantly without compromising on taste.
For more information on Tesco visit www.tesco.com
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