22 September, 2011
Tesco's Big Price Drop
Tesco today announced immediate help for families all over the country in these tough economic times by cutting the price of thousands of essential items - from milk to pasta, fresh fruit and vegetables.
This investment of more than £500m in the Big Price Drop is the result of Tesco listening carefully to the views of over 200,000 customers, understanding shopping behaviour through Clubcard and working closely with families around the country to understand how they are coping in the economic downturn.
Across the country people are saying they need more help with the cost of living. With rising utility bills and soaring petrol prices, families are having to cut back on the staples, not just the extras.
This chimes with evidence from the Institute for Fiscal Studies (IFS) earlier this month that the past decade has been one of the worst in terms of living standards for over 60 years, and that the effects of the recession will be felt for years to come.
The Office of Budget Responsibility also predicts that average earnings will fall over the next two years and there is a growing consensus that the majority of the population - around 80% - are experiencing a ‘squeeze’ on their income from the rising cost of living.
The Big Price Drop will give Britain’s families exactly the help they are asking for:
• People want more help with the cost of their weekly shopping. From Monday, Tesco will reduce the prices of more than 3,000 products that customers need to buy every day - such as milk, bread, fruit and vegetables. Future cuts will also focus on products that families need most.
• In these difficult times, customers are turning away from expensive brands to more affordable own label ranges. Tesco brand products are the most popular in the country and are now even better quality. Over the past 18 months Tesco has improved over 1000 products, with many more to come. Tesco will focus most of the investment in the Big Price Drop on reducing prices on over 1000 Tesco brand products - the products that our customers buy week in week out: carrots, chicken, cheddar cheese, ham, bread, biscuits. Tesco branded products are already considerably cheaper than comparable brands. As a result of this move they will be even better value, in many cases over 50% cheaper than the brands. Buying Tesco brand can significantly reduce the rate of inflation that customers are currently experiencing in their weekly shop.
• Customers have said that they are weary of having to shop around for the best deals and prices changing too often. So we are going to simplify promotions, reducing the number of multi-buys particularly in fresh foods where customers have said they can drive waste. And in order to maximise the savings we can give customers at the checkout on their shopping list, we are ending our double Clubcard points promotion in 4 weeks time.
Tesco will increase the value customers can get from their Clubcard vouchers by improving the exchange rates on the most popular rewards from 3 times to 4 times the value. This includes some of the most popular rewards like Pizza Express, Café Rouge and Strada.
Other improvements will include making Clubcard accessible online and reducing the price of a day entry pass to Alton Towers or Legoland from £13 in Clubcard vouchers to £11 in Clubcard vouchers.
Announcing the Big Price Drop, Tesco UK Chief Executive Richard Brasher said:
“Across the country families are telling us the same thing - their budgets are under real pressure. They want more help today to afford everyday essentials. We have listened carefully and for families facing hard times and looking for genuine savings, The Big Price Drop will cut prices on the products they need to buy the most.
“We're giving customers a more straightforward shop - reducing the number of promotions and putting the emphasis on clear and reliable savings that everyone can benefit from.
“To ensure we make the biggest change we can for customers, we’re going to make a change to Clubcard, ending the double points promotion and returning to one Clubcard point per pound spent.
“Clubcard is an important thank-you for customers. They enjoy being rewarded for their loyalty with Clubcard points they can spend later. But they’re saying very clearly in these difficult times, that they also want more immediate savings at the checkout.
“So we will give them both. Clubcard will still be the best loyalty scheme in the market bar none. And, the Big Price Drop on the Nation’s Shopping List will give families the help they need right now at the checkout.
“My message to our customers in these tough times is clear - we have listened and we are going to help. From Monday, you will be able to save more money everyday at Tesco on the essentials you need the most.”
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