Tesco Big Price Drop kicks off with a 12% price reduction

Unilever and Procter & Gamble head a long list of brand owners targeted in Tesco’s Big Price Drop, The Grocer can reveal.

Despite Tesco’s pledge to put own-label products at the heart of its price offensive, 60% of the 3,000 products reduced in price this week were branded.

Unilever, with 143 products, and P&G, with 126 SKUs, were subject to the largest number of price cuts but major suppliers right across the board have been affected.

Information from BrandView.co.uk indicates at least 20 product lines each from Premier Foods, Reckitt Benckiser, Heinz, Nestlé, Walkers, Coca-Cola and Kraft have been reduced in price, with a host of other suppliers subject to 10 or more reductions.

Branded products have also carried the steepest cuts just six of the biggest 100 reductions are in own label, and only 73 of the biggest 500. The average price reduction was 12%, with branded lines down 13% and own-label lines falling 10%. This compares with a 22% average price ­reduction on promotions over the past six weeks, with beers, wines and spirits the only category to have increased its level of saving.

In terms of categories, crisps recorded the most price drops, with 87 products reduced, followed by cooking sauces and juices and smoothies. Cheddar, fresh fruit and dry pasta were also targeted.

This week, Tesco claimed suppliers it had spoken to were “excited” by its Big Price Drop campaign and as The Grocer went to press it was understood no ­supplier had been told it would be expected to shoulder the cost of the price cuts.

However, sources at several leading suppliers said they had been left in the dark and feared they would come under pressure from rivals looking to respond to Tesco’s move.

“I don’t expect Tesco to ask us to pay for these price cuts this week,” said one managing director. “But I can see nothing but pain coming from this and who can afford to stand up to a retailer that represents a third of the market?”