Maria Stokes, London Office, Bord Bia – Irish Food Board
Launched in 1993 to resonate with the then recession struck consumers, today Tesco’s Value range generates sales in the region of £1bn for the retailer. However, on the back of recent launches including Waitrose Essential’s, Asda’s Chosen by You and Morrison’s M Savers range, the Tesco value range has become increasingly outdated in terms of both design and offer compared to these retail offers. The rival "no frills" ranges’ makeover appears to have worked with the three retailers reporting strong growth as shoppers seek out bargains.
To combat the outdated feel, Tesco will launch a new range under the Everyday Value brand to replace its current Tesco Value range, and will include value products that have a ‘softer’ retro feel, and depict images of the 1950s on pack to entice customers. Tesco have focused on improving not just the design but also the product offer and packaging functionality.
Tesco UK's marketing director, David Wood, said: ‘Tesco was the first supermarket to launch a Value range back in 1993, the blue-and-white striped brand giving customers a down-to-earth option. Almost 20 years on, affordable quality is more relevant than ever, but customer needs have changed. Everyday Value will provide products that taste better, look better and are healthier.’
The supermarket own-label budget market is growing at more than 9% a year, according to Kantar Worldpanel, and with 565 SKUs in the revamped range relaunched, Tesco is hoping to drive further growth and deliver a larger share of the market.
According to brands development director, Sidone Kingsmill, ‘We’ve spent over a year talking to customers, making sure we’ve got it right, although the proof of the pudding will be what the customers think’.
Tesco’s recent results outlined its plans to revive the UK business, with the £1 billion investment including the recruitment and training of over 8,000 new staff in existing stores. The news comes after full-year numbers from the supermarket giant showed a 5.3% rise in pre-tax profit to £3.8 billion, while underlying profit jumped 1.6% to £3.9 billion. Group sales were 7.4% higher at £72 billion and 5.4% higher excluding petrol.
The results matched expectations following a shock profit warning from Tesco earlier this year as the group started losing ground to the likes of Sainsbury in the UK.