Tesco’s marketing tactics are being looked into by the Office of Fair Trading after independent supermarket chain Proudfoot lodged a complaint.
The OFT said it was looking at the complaint under the Competition Act, but it could not be assumed it had been breached.
GW Proudfoot joint MD Ian Proudfoot said sales had dropped 37% at its store in Withernsea, Humberside, as what Tesco has defended as “a short-term marketing campaign” continued.
Tesco distributed vouchers to homes in Withernsea offering a potential £32 off £80 of shopping at its local store in a four-week promotion (The
Grocer on January 24, p.6). Four £8 off £20 spend vouchers were valid for weekly periods to February 15.
Proudfoot said Tesco could only employ these tactics due to its market dominance. He also complained to Tesco chief executive Sir Terry Leahy and was told this was a rare promotional tactic used by Tesco to boost sales in stores where “trade needs to be improved quite significantly”.
In a letter in response to Proudfood’s complaint, Sir Terry said: “I do not think it is reasonable to describe the competition that has taken place in Withernsea as either unfair or anticompetitive.
“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 said he would make another submission to the OFT when the promotion had finished, setting out the effect on sales. They were down 21% in week one and 37% in week two.
Anne Bruce
The OFT said it was looking at the complaint under the Competition Act, but it could not be assumed it had been breached.
GW Proudfoot joint MD Ian Proudfoot said sales had dropped 37% at its store in Withernsea, Humberside, as what Tesco has defended as “a short-term marketing campaign” continued.
Tesco distributed vouchers to homes in Withernsea offering a potential £32 off £80 of shopping at its local store in a four-week promotion (The
Grocer on January 24, p.6). Four £8 off £20 spend vouchers were valid for weekly periods to February 15.
Proudfoot said Tesco could only employ these tactics due to its market dominance. He also complained to Tesco chief executive Sir Terry Leahy and was told this was a rare promotional tactic used by Tesco to boost sales in stores where “trade needs to be improved quite significantly”.
In a letter in response to Proudfood’s complaint, Sir Terry said: “I do not think it is reasonable to describe the competition that has taken place in Withernsea as either unfair or anticompetitive.
“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 said he would make another submission to the OFT when the promotion had finished, setting out the effect on sales. They were down 21% in week one and 37% in week two.
Anne Bruce
No comments yet