Tesco Starts Supermarket Price War

Feb 18, 2002

Shoppers are set to cash in as the four leading supermarket chains prepare for their fiercest price war yet, according to the BBC News. Market leader Tesco has announced it is cutting the cost of 15,000 items on its shelves. The announcement follows a year of price cuts.

Tesco, along with the UK’s third-ranked retailer, Asda, believes in offering customers low prices across the range of goods they stock. Sainsbury and Safeway, the UK’s number four, rely on bigger discounts on selected items. Sainsbury’s managing director Stuart Michell says its customers consider quality and service to be “more and more” important. But Tesco marketing director Tim Mason says, most shoppers are looking for low prices first and foremost. He told BBC News: “Tesco and Asda are the price-cutters and they are the ones who have grown their businesses during the past five years. “Sainsbury and Safeway have tried different things and their businesses have not grown as fast.”

Moderator Comment: How should Tesco (and retailers
in general) deal with negative publicity?

Someone out there does not like Tesco.

The UK tabloid, The Observer, says that while
Tesco is reporting price cuts on 1,500 products it has increased the price on
1,750 products since the New Year.

The article headlined ‘Cost-cutter’
Tesco in new price rise scam
alleges that what the chain is billing
as a major price cut is in fact a hike. If you were responsible for communicating
Tesco’s message, what would be your response to this report? [George
Anderson – Moderator

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