The Great Houdini
With brands reportedly disappearing off Tesco's shelves, will this ultimately result in large swathes of customers vanishing too?
Print12 August 2010
Tesco unfurled a PR coup last month, when the supermarket behemoth announced it would expand its Irish operations to the tune of €113 million, and create 750 new jobs in the process.
Unfortunately for chief executive Tony Keohane and co, readers of the Irish Times’ Pricewatch column had less favourable observations to make on the topic of Tesco’s operations, namely that a long list of their favourite brands had disappeared off the supermarket’s shelves.
Unsurprisingly, this has left the chain open to allegations of boosting its bottom line at the expense of consumer choice. To use Enterprise Minister Batt O’Keeffe’s term, “Tesco’s detractors”- of which there are many, not least the Irish Farmers Association (IFA) – would likely view its axing of well-established brands as demonstrative of the unreasonable power it exerts over the Irish grocery chain.
A concern previously voiced by Suzanne Campbell, the joint-author of Basket Case: What’s Happening to Ireland’s Food?’, when she reflected on the UK’s major supermarkets. “What if they all decide to charge us €50 for a chicken?,” she asked. “In 50 years’ time, there could be nothing we could do.”
Keep it simple
What if, indeed. On the other hand, the model whereby category ranges are streamlined down to own-brand goods and top branded players, doesn’t seem a million miles away from the tactic Campbell has praised in discounters such as Aldi, a move pithily named KISS or ‘Keep It Simple, Stupid!’
The essence of this model is that instead of flummoxing consumers with “a 30-foot display with several varieties of the same product being offered by numerous competing brands,” the store will offer one top quality choice – thus helping keep consumer prices down.
Whether or not Tesco’s own brand ranges constitute the best possible food available however is a matter open to debate.
Superquinn offers greater choice
In this regard, Superquinn has been one retailer quick to highlight that its model can flourish by offering greater choice, where Tesco’s may ultimately reveal itself as fatally flawed.
A spokeswoman for Superquinn told ShelfLife that it offered products allegedly de-listed from Tesco, including “[all varieties of] Barry’s Tea, Fiacla toothpaste, a comprehensive De Cecco Italian pasta and new sauces range, Discovery foods Mexican range, a good variety of Linda McCartney’s Quorn range, Glenisk’s range of yogurts and milks, as well as selected lines from Bunalun, Blue Dragon, King Crisps, Flahavans, Golden Vale, John West and Inversoft kitchen roll and toilet tissue.”
She added Superquinn worked hard to ensure Irish brands could be found on its shelves, and also offered niche and artisan products as well as award-winning own brand goods.
However, ShelfLife visited four stores within the Dublin area belonging to each of the major supermarkets – Superquinn, Dunnes, Supervalu and Tesco, and found no glaringly obvious differences existed in terms of the brands available.
Our research conducted on 19 July, concentrated on the hot beverages, cooking sauces, and pasta categories.
Firstly in hot drinks; while Tesco Jervis Centre dedicated more space to UK favourites such as Punjana and PG Tips, it didn’t seem to be at the expense of Barry’s Tea – which occupied a large portion of the plannogram – although not all varieties were available. Furthermore, while Tesco and the others carried ranges of upmarket coffee brands such as Illy and Lavazza, Tesco had the largest range of own-brand Espresso coffees in the most eye-catching packaging.
Limited choice across the board
Tesco had also received flack for no longer stocking the Discovery Mexican range, yet ShelfLife couldn’t spy Discovery in either Superquinn, Ranelagh, or Dunnes, St Stephen’s Green, either. Dunnes was stocking another branded alternative however – ‘Cantina Mexicana’ – which appeared to be trading on the USP of a lower price point.
It was only in the pasta category where the charges levelled against Tesco of focusing solely on own brand goods and top-sellers rang true. The supermarket’s choice consisted of a range of Roma pastas, Napolina spaghetti and wholewheat variants, Tesco own brand, and as part of Tesco’s increasingly prominent “Discount Brands” lines; ‘Trattoria Verdi’ pasta priced at €0.97 for 1kg. Meanwhile, Superquinn’s Ranelagh branch, true to its word, did stock Italy’s biggest selling pasta , De Cecco.
No doubt it is frustrating for customers when they can’t find their regular choices, but sometimes this lies beyond the supermarket’s control. A spokeswoman for Britvic told ShelfLife that one of the products Irish Times readers complained they could no longer find – Robinson’s High Juice – was actually off Tesco’s shelves because it was “delisted by Britvic in April 2010 and was replaced with the Robinsons Select Squash range,” which she confirmed was “listed and available in Tesco.”
Nevertheless it is undeniable that some suppliers are unhappy with the treatment they’ve suffered at Tesco’s hands. One described the retailer in the Irish Times as “a law unto themselves. We have people calling us to say they can’t find our products on the shelves but we have not been told what is going on by the store.”
Price still the main concern
Ultimately however, the customer’s opinion is the most important one. While some are becoming increasingly frustrated that they can’t find certain goods, the latest market share statistics suggest price remains the uppermost concern.
Kantar Worldpanel statistics published in the Sunday Tribune, show Tesco, along with the German discounters, has been the major winner in the supermarket price wars – increasing its marketshare by 0.9% in the last year to 26.7%, while Dunnes has fallen by 0.6% to 23.5%, Superquinn has slipped by 0.4% to a 6.8% and SuperValu held firm at 20.1%.
Fortunately for Tesco, figures like that can speak for themselves.
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