A woeful PR month for Tesco
Print19 April 2011
Tesco has had a rough month trying to defend its campaign of 1,000 price cuts. The Irish Times revealed that many of the prices advertised as being lowered, had actually risen in price earlier this year before being cut. Tesco put this down to world commodity prices but no one was really buying it.
In the UK the company also came under fire for its Double the Difference campaign. The promotion was initiated in response to rivals Asda’s Price Guarantee campaign but it went spectacularly awry when consumers found a loophole and Tesco had to backtrack on its promises (more details page 62).
Listening to the radio last week would make you believe that Conor Pope from The Irish Times was on a one-man mission to expose Tesco’s unsavory practices. Many would argue that this should be the job of the National Consumer Agency but he must have just piped them to the post. In any case, be it Conor Pope, The NCA or anyone else it wouldn’t be long before the public realised they were been taken for a ride. Consumers are extremely astute and when it comes to price savings promotions, they expect to get what is promised. If this doesn’t happen it leads to a shed load of bad will against the company.
The website www.boards.ie is an excellent way to take the temperature of the masses. This is a flavour of what they were writing about Tesco’s pricing policy this month.
“Sneaky marketing at its best…. it’s a master class on how to raise your prices and make people think that you’ve reduced them”
“Irish Law is a mess in this area. The national consumer agency needs to actually do its job, the supermarkets constantly track each other’s main product prices but the NCA doesn’t seem to bother”
“Listening to Conor Pope on the radio yesterday about this, and he discovered that there is no such requirement in law. The law states that it must be on sale for the higher price for a reasonable period, but does not define a time frame. The NCA have defined reasonable as 28 days, not 3 months”
“In this case, Tesco were charging the higher prices for more than 28 days, and hence the NCA will not investigate or penalise them. Tesco have done nothing outside the law”
“Prices of food does go up and down, but only Tesco seem to make a big deal of the price reductions, making it look like it’s all down to them, and that it’s somehow a good thing. The reductions could just be part of the overall fluctuation in the food industry’s prices. It would be like a petrol station claiming to have a sale on every time the price of a barrel of oil goes down by a dollar”
“Conor Pope also stressed that there was no evidence that Tesco deliberately put up the prices over the last number of months, just so as to claim a reduction now. But this is not the first time that Tesco has had such a campaign where the prices just went back to what they were several months previously”
“Now that Tesco may have reduced some prices I expect them to be reduced in Dunnes as well – whether Dunnes make a song and dance about it is another thing.
Lidl and Aldi don’t seem to engage in the same style of price matching each other to the extent that Tesco/Dunnes do”
“While I completely agree that Tesco is being disingenuous with it’s pricing, why weren’t people complaining when the price rises happened earlier this year? As far as I’m concerned Tesco should have been blasted for these rises too…and not because of their attempt to try to look good for having cuts.”
“It’s the other supermarkets falling into line that I don’t like. Every time something increases in price in Tesco and I notice it, within a week or so it’s the same price or a cent in the difference in Dunnes. The retailer in me says it’s the wholesale price of the items increasing while the consumer in me thinks it’s Dunnes capitalising on Tesco making a bit more of a margin on goods.”
“Anybody remember Tesco’s last round of cuts where they tried to tell us that the cuts were long term? They lasted about 4 mths before their prices started creeping up again.
Only way Tesco will learn is if people vote with their feet – as any publicity is good publicity for them.”
So the morale of the story is, don’t make promises to your customers that you can’t back up as it takes an awful long time to build up credibility but it takes just one dodgy promotion to see it all crumble away.
Colette O’ Connor and Fionnuala Carolan
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