Tesco: drops prices again as fight for Christmas money hots up
Tesco is cutting prices on 1,000 further items, as Britain's biggest retailer said the competition for Christmas shoppers was as intense as it had ever been.
Radical says
Christmas had to come early so we could send presents off to the Philippines and my wife's family.
This coincided with a generous voucher from Tesco because we use their Credit card.
Also £6 discount for every £30 spent.
Asda also offered discounts of £5 off for £40 spend plus £2 voucher.
Sainsburys have yet to move on this and Morrisons offer is above me.
What really has been noticed are the own brand discounts too.
Usually at this time everything goes up in price and this is true for the catchiy christmas items but role on the sales.
We bought the hind quarter beef and so will be having beef this christmas with the lamb we bought earlier - both at £5 per kg. I saw Filet steak at £30 per Kilo the other day so I will enjoy mine even more.
So the message is get a chest freezer for those bargains on Christmas and New Years Eve.
Richard Brasher, the head of Tesco's UK business, however said that the company was winning over customers from rivals, especially after it introduced interest-free credit on electrical goods for the very first time.
The company said that since it introduced interest-free credit four weeks ago on electrical items above £399 it was underwriting ten times the previous amount of credit insurance and that 60pc of all iPads were now being sold on interest-free deals.
Mr Brasher made his comments as the company announced an extension to its "Price Drop" promotion, first unveiled in October, when it promised to cut £500m in prices on 1,000 items. Mr Brasher would not put a value on the Christmas price drop, mostly food, but said they were in addition to the £500m already announced.
"Customers have money to spend but they will not part with it unless it's absolutely right, be it price or range or quality."
He said that the original price drop campaign – designed to revers a market share slippage – had helped lower shoppers' individual inflation rates and had meant that Tesco had increased the number of transactions it had completed.
Some analysts were sceptical, saying it was just a marketing campaign, but last week the Office for National Statistics appeared to back up his claim, after its said that food prices fell 0.9 per cent in October compared with September after supermarkets started to scrap over prices.
Mr Brasher, who was highlighting how Tesco had prepared for Christmas, said that a number of large stores would open until 10 or 11 o'clock at night on Christmas Eve to win over last-minute shoppers.
The company said it expected to sell 2m Christmas puddings, 1m yule logs, 7.5m packs of mince pies and 27.8m individual carrots in the run up to Christmas.
However, he said that the company was making most progress in some of its non-food areas, most notably toys and electricals. In the toy department it has rolled out a range of products, under the Tesco label 'Carousel', which it hopes by next year will be a bigger seller than Fisher Price in the supermarket. Its market share in toys has moved from 11pc to 12pc it said, and though it was behind Argos in value terms it was ahead in volume terms.
In electricals it has now grown to become third equal biggest retailer with Comet, but behind Dixons and Argos, after stocking iPads and Kindles for the first time. Mr Brasher said: "A year ago if you came into a Tesco wanting to buy must-have electricals, we didn't have them."
It has started selling items (as long as they are valued at £399 or more) on interest-free terms for six months, with shoppers given an option to pay in instalments over this period. An interest rate of about 19.7pc kicks in only after the six months finishes, if the shopper has not paid it off in full. Ian Ditcham, the director in charge of electricals, said: "Everybody is feeling the pinch but people still want to buy their technology – they just they want to budget for it. A £399 iPad suddenly become £66 a month. It's proving hugely popular."
Sainsbury's hit back at Tesco's price drop by saying: "We saw last time round that the ‘Big Price Drop’ was actually more a ‘sneaky price rise’ and we are confident that customers won’t be fooled again."
