Tesco discounting strategy backfires

small shopping trolleys

small shopping trolleysThe days of being loyal to a single supermarket brand are seemingly long gone.

In the current financial climate most of us will just chase the bargains, the vouchers, and go wherever is providing the best value for money. Have you recently changed where you do your weekly food shop for this reason?

Following its worst Christmas for decades, Tesco is planning new measures to bounce back and reclaim the supermarket top spot.

This is a strange position for Tesco to find itself in after around 30 years of continuous success, but the chain has warned that profits could fall during 2012.

Analysts have pointed out that people deserting Tesco for major rivals such as Sainsbury's and Asda - not to mention up and coming budget outlets such as Aldi and Lidl - were the reasons for the downturn during the all-important festive period.

They highlighted that money-off coupons and other initiatives had overshadowed Tesco's 'Big Price Drop', which has since been cheekily dubbed the 'Big Price Flop'.

Tesco boss Philip Clarke pledged that millions of pounds would be used to increase the quality of fresh foods, product ranges and customer services.

He said: "This isn't going to kill us, it is going to make us stronger."

Kantar Worldpanel analyst Bryan Roberts explained that Tesco has shown the same "complacency" that allowed it to overtake Sainsbury's in the 1990s.

He said: "Big Price Drop is clearly not enough to win shoppers. Value is not just about price.

"It is also about standards, service, quality, and freshness and Tesco has been letting all of these slip."

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