Tesco looks set to launch a new price offensive next week, with a possible switch in emphasis from promotions to permanently low prices, according to sister title The Grocer.
Commenting on the rumoured repositioning, leading investment bank Evolution Securities said industry sources have reported that Tesco’s prices have crept up in recent weeks, “and at this time of year this suggests movement up before a bigger move down in prices”.
Dave McCarthy, Evolution Securities, said it would not be surprised if the retailer launched a major repositioning along the lines mentioned in Evolution’s January note: ‘Tesco Tuesday – Price Repositioning Needed’, in which it said it would expect, and hope, Tesco’s action to be a targeted repositioning in price, “focussed on areas where Tesco under-indexes vs the competition”.
“The company has failed to gain traction throughout this year, despite the new CEO saying there was nothing structurally wrong with the company or industry,” commented Evolution Securities.
It said the retailer had tried many incentives over the past few years, such as double Clubcard points, and discount ranges, to help kick-start its business, “but none of these efforts has created a major improvement in underlying performance”. It added that the retailer needed a new strategic direction.
As yet, no information has come to light about possible price restructuring within bakery.