Tesco has announced the end of its Brand Guarantee scheme, which offers customers price matches on branded goods.
The supermarket said it was phasing out the scheme because “as a result of our continued investment in simpler, lower everyday prices, fewer than one in eight transactions today receives any refund at all”. Brand Guarantee will come to an end on 16 July.
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Alessandra Bellini, Tesco chief customer officer, said: “Since Brand Guarantee launched in 2015, we have continued to invest in simpler, lower everyday prices. As a result, the scheme is far less relevant for our customers today, and so we are withdrawing it as we focus on offering customers even more straightforward value for money at the shelf edge.
“In recent weeks, we’ve already reduced the prices of over 260 popular products, including own brand and branded favourites, and we’ll continue to work hard to offer our customers great quality food at great prices.”
Martin Lane, managing editor of money.co.uk, warned that Tesco customers might be angered by the move, and said the supermarket risks losing customers as a consequence.
“The promise of lower prices across the board might sound appealing but there’s no longer a guarantee you couldn’t get cheaper elsewhere,” he said.
“With discount retailers expanding into central London there’s lots of choice available for consumers. Tesco have got their work cut out to compete against the likes of Aldi and Lidl and if they don’t offer true value they could be at risk of losing loyal shoppers.
“It will be interesting to see if this move will help Tesco customers because the current system can be confusing and scrapping the scheme might help people to make an easier comparison. Let’s hope the revision of prices will be competitive because this change is likely to prove unpopular.”
Tesco recently announced its intention to close down its loss-making online operation, Tesco Direct, putting up to 500 jobs at risk.
The group is in the midst of a turnaround, and reported an 800 per cent rise in profits last year, in a sign that the business was making progress.
Meanwhile, the supermarket’s £3.7bn takeover of wholesale firm Booker looks like it is paying off, with sales rising for the 10th quarter in a row in the three months to the end of May. As part of Tesco’s restructuring plans, the group is continuing to work towards a target of relaunching 10,000 own-brand products, and has put 2,850 back on shelves so far.