Tesco has ploughed headlong into another row over alleged anti-competitive practices after reigniting a controversial vouchers scheme that was previously at the centre of an OFT probe.
The supermarket giant is running the gauntlet of local retailers once again after mailing out thousands of vouchers offering potential customers £10 off their shopping when they spend £30 or more.
The offer is currently being made to shoppers near Tesco’s Hall Road supermarket in Hull, although the retailer is understood to have introduced similar offers at stores in Leeds and Edinburgh.
Retailers in Hull, which is less than 15 miles from the site of the last controversial Tesco promotion at Withernsea, have reacted with anger.
David Thompson, sales and development director for Costcutter, which has several stores near the Hall Road supermarket, said: “This is an extremely aggressive promotion that can only attract more customers in to their (Tesco’s) stores.”
However, Thompson declined to comment on whether Costcutter would be asking the competition authorities to intervene at this stage.
The Grocer last year revealed how Tesco ran into a barrage of opposition from leading independent chain Proudfoot when it launched a similar promotion offering consumers an £8 discount for every £20 that they spent.
That episode was only brought to a close after a six month war of words between the two retailers ended with an OFT ruling that cleared Tesco of “abusive” trading.
At one stage, Tesco chief Sir Terry Leahy even wrote to Proudfoot claiming: “I do not think it is reasonable to describe the competition that has taken place in Withernsea as either unfair or anti-competitive.
“Good retailers thrive on competition, and I am sure you will agree that those who understand their customers and provide what they want have nothing to fear from it.”
Proudfoot had claimed Tesco’s promotion was aimed at putting it out of business and that sales at its Withernsea store fell by 37% at one stage.
As part of its report into the affair, the OFT noted that Tesco had described the mailshot promotion as a “short-term initiative made in response to competition” and that it had “no plans to repeat the promotion”.
Proudfoot’s joint MD, Mark Proudfoot, said this week: “It is unfair competition once again. Tesco has £2bn to play with and we would hope retailers directly affected by this promotion will complain.”
No one from Tesco was available to comment.
Simon Mowbray
The supermarket giant is running the gauntlet of local retailers once again after mailing out thousands of vouchers offering potential customers £10 off their shopping when they spend £30 or more.
The offer is currently being made to shoppers near Tesco’s Hall Road supermarket in Hull, although the retailer is understood to have introduced similar offers at stores in Leeds and Edinburgh.
Retailers in Hull, which is less than 15 miles from the site of the last controversial Tesco promotion at Withernsea, have reacted with anger.
David Thompson, sales and development director for Costcutter, which has several stores near the Hall Road supermarket, said: “This is an extremely aggressive promotion that can only attract more customers in to their (Tesco’s) stores.”
However, Thompson declined to comment on whether Costcutter would be asking the competition authorities to intervene at this stage.
The Grocer last year revealed how Tesco ran into a barrage of opposition from leading independent chain Proudfoot when it launched a similar promotion offering consumers an £8 discount for every £20 that they spent.
That episode was only brought to a close after a six month war of words between the two retailers ended with an OFT ruling that cleared Tesco of “abusive” trading.
At one stage, Tesco chief Sir Terry Leahy even wrote to Proudfoot claiming: “I do not think it is reasonable to describe the competition that has taken place in Withernsea as either unfair or anti-competitive.
“Good retailers thrive on competition, and I am sure you will agree that those who understand their customers and provide what they want have nothing to fear from it.”
Proudfoot had claimed Tesco’s promotion was aimed at putting it out of business and that sales at its Withernsea store fell by 37% at one stage.
As part of its report into the affair, the OFT noted that Tesco had described the mailshot promotion as a “short-term initiative made in response to competition” and that it had “no plans to repeat the promotion”.
Proudfoot’s joint MD, Mark Proudfoot, said this week: “It is unfair competition once again. Tesco has £2bn to play with and we would hope retailers directly affected by this promotion will complain.”
No one from Tesco was available to comment.
Simon Mowbray
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