As consumers fume amid a press furore, was Double the Difference just embarrassing for Tesco or does it reveal deeper problems? By James Halliwell
| Tesco did its best to play down its decision to backtrack on the Double the Difference price pledge last Thursday, informing The Grocer that fewer than 1,000 people had exploited a loophole. However, news of the flaw was by this time spreading far and wide, after a moneysavingexpert.com thread alerted its army of fans to a new website, www.pricecheck.logicalinternetsolutions.com . Built specifically for shoppers to exploit Double the Difference, not only did it save the shopper hours of research, the deals it highlighted were simply incredible. A customer could walk away with eight bottles of £10.49 wine costing £83.92, plus a voucher for £91.36, making a profit of £7.44. A deal on Tesco roasting tins saw shoppers pay £20 for two, but get a voucher for £24. And although vouchers were supposedly capped at £100, some shoppers who accidentally generated vouchers of more than £100 after getting carried away reported that even £100+ vouchers were accepted in stores, as confusion reigned at the tills. Excited consumers spread the word on websites ranging from football fan forums to celebrity gossip websites. Finally Tesco had no alternative but to limit the damage. On Thursday it capped vouchers at £20. The resulting furore saw the story explode into life in the mainstream media, forcing Tesco to spend the weekend defending its campaign. Launched as a spoiler to Asda’s Price Guarantee, Tesco’s Double the Difference featured a crucial difference: it was far more generous. A thread had appeared on moneysavingexpert.com on 13 March entitled ‘Tesco/Asda Pricechecker finds here…’ explaining how shoppers could search Tesco’s Pricecheck website for items sold cheaper at Asda, then check the price against Asda grocery website. If a generous difference existed, it explained, so did a great deal. But it required the shopper to go through a laborious and random process to build a full shopping list. Then the touchpaper was lit. A link to a brand new website, www.pricecheck.logicalinternetsolutions.com , appeared in the thread on 15 March. It was quickly and strangely deleted without explanation, but eagle-eyed members had bookmarked it, and began sending it on to others, privately. And the URL followed an established rule of the internet: once something juicy is out there, there is no way to stop it going viral. The website wasn’t slick, but it was user-friendly. It presented its findings like a shopping list, ready to print, and perfect for swift online mobile browsing in supermarket aisles. But above all it showed how if shoppers worked the system cleverly, they wouldn’t just save money by shopping at Tesco. They could be quids in. Unwittingly, Tesco had created a whole new promotional mechanic. Buy one, get it free, plus cash. Just over a week after the URL appeared, Tesco capped refunds to £20. But this move just poured petrol onto the fire as it emerged that even consumers who submitted their receipts before the cap were emailed vouchers limited to £20. Tesco had set the new limit retrospectively. There were howls of anger from the forums. Meanwhile Tesco’s new Facebook page began to fill with abuse from outraged customers. The ranting soon turned into plans to call the press. Numbers for the newsdesks at the Daily Mail and The Sun were posted. On Friday, both papers ran the story and over the weekend Tesco was forced into defending the deal. The reaction was so strong that the moneysavingexpert.com thread closed after reaching a thread limit of 10,000 posts, a new record for MSE. A second thread has now opened. The ASA said this week it had received “less than a dozen” complaints, and confirmed they “relate to concerns that Tesco are not honouring or have changed the terms and conditions of their offer”. So how much has this so-called spoiler cost Tesco? Experts believe the financial impact to date is minimal, but damage has been done to Tesco’s reputation. “It won’t be a financial catastrophe but it is embarrassing,” says Dave McCarthy, from analysts Evolution. “Tesco rushed this out and it was ill-prepared. There was a very obvious flaw that plenty of industry veterans spotted immediately. And the public woke up to it because the collective consciousness and intelligence of the consumer is a lot greater than a few marketing executives. So they will always find these loopholes.” “In publicity terms it’s been a disaster for them,” agrees Neil Saunders of analysts Verdict. “It looks like they have gone back on a commitment they have made.” Asda is also crowing. “In the modern internet era of transparency,” a spokesman wrote, “it isn’t wise to pretend to be something you’re not. By contrast, the APG does exactly what it says on the tin. If we’re not 10% cheaper than all of our major rivals, we put our money where our mouth is.” McCarthy believes the problems at Tesco run deeper than this embarrassing blip. “It signals the more important underlying issues at Tesco. They lack innovation and are responsive as opposed to being on the front foot. Innovation was a cornerstone in Tesco’s rise to dominance, like Value lines, Clubcard and formats. “But in recent years they have been beaten to the punch, like on Feed Your Family for a Fiver and the Asda price promise. They are experiencing a long period of underperformance, which they need to address.” However, while the headlines made a lot of noise, Saunders believes most shoppers now have promotion apathy. “These promotions have become so complicated and convoluted that I don’t think the majority of shoppers can be bothered to get into it. What is actually required is a very keen focus on everyday low price and very clear marketing around that message. “It isn’t any more complicated than that. You can make it more complex but it doesn’t do you any favours. What is much more important is what people feel when the total flashes up at the till.” Tesco has promised to keep going with the revised price initative. “There is no intention whatsoever to call a halt,” says a spokesman, “for the simple reason that the cap will only affect a tiny number of customers. It won’t affect anyone doing a normal weekly shop.” So is the party over? A bottle of Hardys Crest red wine currently available for £10.99 in Tesco would generate a voucher worth £12.42, a profit of £1.43. So profits are still there to be made. But has Tesco done enough to stop thousands of shoppers seeking out the products that will result in a £20 voucher every week, potentially forcing it to pull the campaign altogether? It has. A small addition was made to Tesco’s terms and conditions on Thursday. General point 2 now states that Tesco reserves the right to withhold, issue or redeem a voucher if it suspects customers are “abusing the spirit of the Price Check scheme”. That is a loophole killer. But it won’t win Tesco any friends. | Getting Ready Nivea Pearl and Beauty roll on Tesco - £2.03 Asda - £1.00 Difference - £1.03 Double it! - £2.06 Schwarzkopf Sparkling Shine Hairspray Tesco - £4.00 Asda - £1.98 Difference - £2.02 Double it! - £4.04 Drinks & Snacks Hardys Crest Cabernet Shiraz Merlot x 4 bottles Tesco - £41.96 Asda - £19.12 Difference - £22.84 Double it! - £45.68 Magners 8pk Cider Tesco - £10.99 Asda - £7.00 Difference - £3.99 Double it! - £7.98 Ocean Spray cranberry juice Tesco - £1.09 Asda - £0.50 Difference - £0.59 Double it! - £1.18 Walkers 18-pk French Fries: Tesco - £4.07 Asda - £2.00 Difference - £2.07 Double it! - £4.14 Dinner Sirloin steaks Tesco - £15.47 Asda - £12.00 Difference - £3.47 Double it! - £6.94 McCain lightly spiced wedges Tesco - £1.85 Asda - £1.00 Difference - £0.85 Double it! - £1.70 Birds Eye Field Fresh Sweetcorn Tesco - £1.75 Asda - £1.00 Difference - £0.75 Double it! - £1.50 Pudding Cornetto Enigmas x 4 Tesco - £2.50 Asda - £1.00 Difference - £1.50 Double it! - £3.00 After Dinner Baileys liqueur: Tesco - £19.19 Asda - £10.00 Difference - £9.19 Double it! - £18.38 TOTALS Tesco: Cost of items - £104.90 Asda: Cost of items - £56.60 Refund: Was £96.60* Now £20 Party Cost: Was £8.30* Now £84.90* Source: all prices and savings identified by www.pricecheck. logicalinternetsolutions.com from Tesco and Asda websites on 15 March. * Notes: In this example, after doubling the £48.30 difference between the 11 items on the Tesco and Asda shop, the £96.60 refund meant the shopper could host a party for less than a tenner. With a £20 cap and other new T&Cs, the the shopper is £28.30 better off stocking up at Asda. |
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