Tesco has said it will bear the whole cost of latest fresh produce price cuts, while one expert says reductions will have little impact and may confuse consumers.
“The cost of the price reductions will be borne entirely by Tesco, not passed on to suppliers,” a spokesperson for Tesco told FPJ.
Yesterday fresh produce was at the forefront of a new wave of price cuts at the UK’s largest retailer, as it slashed the prices of broccoli, peppers, lettuce and cucumber.
A six-pack of salad tomatoes has been reduced from £1 to 69p, while further cuts have been made across other categories in more than 30 products.
But retail analyst Steve Dresser believes the effect of Tesco’s latest price cuts will be diminished, as in many cases the retailer has only re-balanced prices to align those of loose produce with previously-discounted multipacks or other portion sizes.
He said: “Tesco reduced whole cucumbers to 49p to come into line with Morrisons, which left the cucumber portions at a disproportionate price when considering the price of a full cucumber.
“This meant that the investment has had to be spread to the same products, albeit different pack sizes. So the impact of the reduction is reduced too. Peppers were another one, the loose ones were 90p each, but after the first price cuts campaign, a three-pack became 99p.”
“It makes no sense to the customer and the impact of such a reduction is then diminished,” he said.
Dresser added: “They need to decide their strategy on produce and back the range - not 'range' everything and reduce it by 20 per cent. A better cut would be to back one pack size and reduce by 35 or 40 per cent.”
Elsewhere, Dresser said it’s “noteworthy” that Sainsbury’s is currently advertising 69p price points across its produce departments, as a price point favoured by the discounters.
“Aldi and Lidl will react and merely knock 2 to 3p off their own base price as they did with lettuce,” he said. “Morrisons, and now Tesco, have gone to 49p, Aldi were 48p anyway but reduced to 45p.”
Dresser said that Sainsbury’s has also reacted by reducing products –although not advertised explicitly – to remain competitive, and even Waitrose has brought prices of some lines down.
Across the channel, retail prices are also causing a stir as French producer groups have written to the country’s retailers to criticise 'abusive' promotions, and said they refuse to act as 'cannon fodder' in the supermarket battle.
