Tesco is charging up to 14 per cent more in its One Stop-branded stores in areas where it faces little competition, according to a new investigation.
Tesco has kept claims that it charges the same price for goods wherever the store is located central to its argument against curbs on its expansion, but a study by The Times has thrown doubt upon this.
Tesco owns 520 One Stop convenience outlets which are commonly found in poorer neighbourhoods than equivalent Tesco stores, leading to accusations that the UK’s largest supermarket was contributing to “food deserts” in deprived areas.
The One Stop chain was acquired by Tesco in 2003. About 450 of the shops were converted into Tesco Express but the remaining business has expanded in the past five years, and it has been suggested Tesco has deliberately not converted some stores where a lack of local competition enables it to charge higher prices.
One Stop accounts for about 20 per cent of Tesco’s British store network, with a turnover of more than £500 million and the possibility of adding 440 stores to the network by converting its petrol station forecourt shops into One Stops.
A random sample of 120 items checked by The Times showed that prices at One Stop are 14 per cent higher than in other Tesco stores.
The retail location researcher CACI reports that One Stop has an average of 0.2 competitor convenience stores within a half-mile radius of each shop, compared with 0.49 for Tesco Express.
Tesco had claimed that its scale benefits consumers because there is no local variation in prices, but these findings appear to contradict this.
A Tesco spokesperson said that, while there is some overlap in buying operations, One Stop’s supply chain, operating costs and distribution network were different to Tesco’s.
