The next step in Tesco's UK refocus is announced.
As Tesco (LSE: TSCO) continues in its quest to firm up its UK supermarket sales, news is just in of its next step -- the long overdue rebranding of its low-cost "Value" line of goods. This comes after the announcement of the closure of Tesco Cars earlier this week, when we were told that the company is refocusing back on its core business.
Own-label goods have been gracing the UK's supermarket shelves for the past 20 years, as price wars against higher-priced branded goods, started by Kwik-Save's super cheap baked beans, have captured more and more of the nation's food spending.
But in recent years, the simple "Look at me, I'm really cheap" branding has been falling out of favour, for a number of reasons. For one, many of our branded food producers have been fighting back with their own price promotions, and have been reasserting some of their old clout.
And there is a segment of the population who, while they want to save money by buying lower-priced goods, are embarrassed to be seen carrying home tins of those prominently marked 'cheapest' products -- it's the same kind of thinking that keeps people out of Aldi and Lidl, where they really don't want to be seen.
Following on from rivals Asda and J Sainsbury (LSE: SBRY), Tesco's newly christened "Everyday Value" range will have a packaging makeover, with the old blue-and-white striped look being replaced by more upbeat images.
The revamp also includes a focus on better health, with levels of things like hydrogenated fats and monosodium glutamate being lowered in a number of Tesco's more-than-500 lines of own-brand products.
It's a significant move to make, and there is now speculation that Tesco's other own-brand lines like it's 'Finest' range of products could be also be set for a makeover.
But will it make a difference and entice people back from those rival supermarkets?
Well, I think the Value range really was looking long in the tooth, and its old look did need ditching. But though people clearly are influenced by packaging, it was a misjudgment over pricing and promotional activity that led to Tesco's fall in market share.
What people really want is their 'BOGOF' and 'twofer' deals, and their price-matching offers -- not pictures of puppies and kittens on the labels (or whatever the new ones look like). Now, I wonder if my local Tesco still has any Singha beer at 3 for the price of 2...
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