- Tesco is dropping its Brand Guarantee, launched by boss Dave Lewis in 2015
- It has vowed to cut the prices on more everyday items instead
- The grocery price war is raging as supermarkets try to compete with discounters
Tesco is ditching its Brand Guarantee price-matching scheme to focus instead on cutting the prices of everyday products, it announced today.
The UK’s biggest supermarket argued that less than one in eight transactions receives any refund under the scheme and said the ‘majority’ of customers would prefer lower everyday prices.
In a statement today, Tesco pledged to make additional price cuts on popular products, which will be introduced in stores over the next two weeks.
Tesco dropped its Brand Guarantee after collecting customer feedback on the scheme
The Brand Guarantee, launched in 2015, gave shoppers who purchased at least 10 items, including one or more branded product, an instant discount.
Customers got money back if branded goods could have been bought at lower prices from Asda, Sainsbury’s and Morrisons.
Tesco found that shoppers would prefer everyday low prices on popular items instead
However, Tesco chief customer officer Alessandra Bellini said the scheme has lost relevance.
‘The scheme is far less relevant for our customers today, and so we are withdrawing it as we focus on offering customers even more straightforward value for money at the shelf edge.
‘In recent weeks, we’ve already reduced the prices of over 260 popular products, including own brand and branded favourites,’ she said.
Tesco boss Dave Lewis has overseen more than two years of sales growth
It follows hard on the heels of a decision by Tesco to strip thousands of branded household products from its shelves, and replace them with its own product ranges, as it bids to compete with cheaper rivals.
Supermarkets have been forced to cut prices since discounters Aldi and Lidl turned shoppers’ heads and gained ground across the UK.
Tesco is making something of a comeback in recent years, having suffered before that a series of setbacks and declining market share.
Its shares have risen by 25 per cent since the start of this year, as Tesco completed its acquisition of wholesaler Booker and reported its tenth consecutive quarter of sales growth.
However, the market leader could be facing the fresh threat of a merged Asda and Sainsbury’s if a proposed £13billion deal between the two supermarkets is given the go-ahead.