Price-cutter Waitrose tweaks Tesco by the tail

Grocer to the UK middle classes Waitrose, owned by the John Lewis Partnership, says it’s going to match market leader Tesco’s prices on 1,000 branded goods. On the face of it this looks like an extension of its highly-successful lower-priced Essentials range which is thought to have boosted Waitrose sales by up to 30 percent.

Waitrose says that Essentials sales have been incremental and not hurt its higher-priced products although clearly the range must have had an effect on margins across the piece. Matching Tesco on 1,000 branded products (Heinz Ketchup, Persil et al) clearly won’t do much for margins either.

Tesco, like its rival Sainsbury’s, has three labels, Finest (posh stuff), own label and Value, which seems almost designed to look cheap and nasty. It will be interesting to see if it responds to the Waitrose move by cutting the cost of Finest and promoting it (to hit Waitrose standard sales) and featuring price comparisons with Waitrose on its own labelling.

For its part Waitrose says it’s chosen Tesco for the price comparison because it’s the market leader, it’s not personal.

But will they see it that way at Tesco Towers in Cheshunt?

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About Angie Dean