Tesco’s latest venture delivers a taste of Italy

Tesco has ramped up its branded activity this week with the launch of a range of Italian products.

The Parioli line-up, rolling out to stores now, includes pasta, cooking sauces, olive oil and tinned tomatoes, but industry insiders have predicted it will be extended into other areas.

As with the retailer’s venture brands, Parioli is supported by a dedicated website, www.pariolicucina.com, reinforcing its positioning as a standalone brand. Tesco is named only in small type at the bottom of pages, but the site’s ‘buy’ button takes shoppers directly to the main Tesco website although Parioli products were not yet listed there as The Grocer went to press.

Suppliers in the Italian food market said the launch was an attempt to match the quality of leading brands and claimed branded products had been delisted to make way for Parioli lines.

One observer suggested the premium-level pricing of Parioli tinned tomatoes at 98p a can meant it was likely Tesco would adopt a high-low pricing strategy, and said observers should “expect a lot of half-price and bogof activity”.

Others have questioned the business model for some of its branded activity. “Leading brands in the category tend to have strong advertising investment behind them,” said one. “Brands that purely trade on price and promotions tend to peak when on deal but sales fall back when that’s over. I thought their venture brand strategy was about finding a gap in the category, but I don’t see what their point of difference is versus the authentic Italian brands like Sacla’, Bertolli or Napolina.”

The roll-out of Parioli comes a week after Tesco admitted it planned to slash the number of suppliers to its Central European stores and replace their products with its venture brands. The announcement sparked speculation it could provide a model for changes in the UK, too and industry observers warned it could have major implications for some suppliers, including Premier Foods, which recently saw 25% of its SKUs temporarily pulled from Tesco shelves in a dispute over price hikes.

The launch of Parioli follows the rollout of venture brands Chokablok premium ice cream, Lathams dogfood, and catfood range Nutricat last month, none of which are overtly Tesco-branded.

The ranges were preceded in March by 100% British yoghurt brand Yoo.

Pundits have predicted the next venture brand will be a range of feminine hygiene products under the name Halo, which Tesco has recently trademarked. The retailer has already registered the names Emmi, Revs and Carousel for use in the toy market.