/ Food & Drink, Shopping

I’m won over by Tesco’s Big Price Drop – are you?

Tesco superstore Clapham

So it comes to this – the banks won’t help us, and neither will the energy companies or petrol stations. But, amazingly Tesco will – today it’s lowering prices over 3,000 items. Will the Big Price Drop help you budget?

I say ‘amazingly’, because this is one giant organisation that I never thought I’d be praising in a Conversation.

Yet, credit where it’s due, today’s launch of the Big Price Drop promises to slash the price of more than 3,000 everyday products, from loaves of bread to cheese and ham.

Admittedly, the retailer isn’t doing this out of the goodness of its heart – but it’s a sure-fire way to melt the hearts of the armies of consumers who are paying through the nose for just about everything right now.

Sure, it’s a cunning plan to steal customers away from the competition, but bring it on. Who knows, it may even spark a price war on the high streets?

Shining a spotlight on other services

What Tesco’s Big Price Drop also does is put an intense spotlight on other key product and service providers. It would be nice to think that banks – with their lousy interest rates on accounts and high rates on credit cards and loans – will take heed and follow suit. After all, they’re not exactly winning people over right now.

And if banks want to regain consumers’ trust, offering us a decent interest rate seems a logical place to start. I bet they won’t feel the heat of that particular spotlight though.

And neither will the train providers. Ticket prices are so high that transport secretary Phillip Hammond recently went so far as to say that they are a ‘rich man’s toy’. Great, because it’s not as if it’s dirt cheap to fill up the car with fuel – another example of a sector that passes on price increases like they are going out of fashion, but stalls when the prices fall.

Winners and losers

Given how much we spend on the weekly shop, the news that one supermarket (Britain’s biggest to boot) is reducing prices is welcome. But it still comes with a sting in the tail, as the banks, lenders, energy companies, transport sector and so on will prove to be the real winners. They’ll continue to gobble up all of our spare cash, including a proportion of the change we save on groceries.

I don’t know whether champagne will be among the products on special offer, but I guess the fat cats who run our banks, transport and utility companies can afford the full price anyway, don’t you?

Will Tesco's Big Price Drop help you save on your shopping?

No, it's just a PR stunt (44%, 444 Votes)

Not sure, I'll have to give it a try to see (35%, 358 Votes)

Yes, I'll be shopping there (21%, 217 Votes)

Total Voters: 1,019

Loading ... Loading ...
Comments
Graeme says:
26 September 2011

Went shopping today, everything I bought was the same price or offer as last week except for milk. Last week was 3 for three pounds, now a single carton has reduced from £1.49 to £1.25 but with no multibuy means a 25% increase to me. Not overly impressed, especially as clubcard rewards being reduced, might start looking at asda and morrisons more often, never thought I’d say that

Yes the milk is dear at Tesco’s who along with Morrissons and Sainsburys, all who have done a pretty good job of keeping the price very high which it still is considering that it is bought and on the supermarket shelves at a cost price of just under 40p.
They wont reduce their prices all they do is keep shuffling prices around, the average cost of a typical family shop at Tescos has actually increased during this supposed price reduction con stunt that they have pulled off.!

Sophie Gilbert says:
27 September 2011

I expect to be derided when I say this, but I’m on a below average salary, so every little does help. I shop at Tesco anyway because they’re the closest supermarket to me, both at work and at home, so I hope to take advantage of this big price drop.

Larry Wedley says:
28 September 2011

Sophie – if you want to save real money – shop at Aldi or Lidl’s!!! They rarely have price cuts in their stores beacuse the prices are rock bottom already. I’m saving £4,000 per year!!

Alistair says:
27 September 2011

The one thing that nobody seems to have asked Tesco is how many of their other lines are being increased.

I totally agree with Alistair, I shopped at Tesco’s only to find theyhad push the extra pennies to somewhere else in the store, the country is in a recession that does not exempt Tesco just playing smart as always.

Quite. Somehow I can’t see Tesco cutting down on their revenue, so the price cuts are going to be balanced out somewhere else for sure. I would be interested to find out if anybody can detect what that is.

Questions:

What is the percentage price-drop on the affected lines? Anything’s welcome – but an overall drop of under a few percent’s not worth shouting about. And if many of these items would be on temporary ‘sale’ price anyway – as I’m sure they would – what’s the net effect of these reductions?

How long will the drop last?

Will prices of other commonly-bought items rise as ‘re-balance’?

I’d suggest bthat you only get a valid insight into the overall effect of these reductions over a month’s shop…

As usual it won’t be the supermarkets who take the hit but their suppliers many of whom are small businesses who can’t afford to have their income squeezed.

But who cares, we get stuff cheap and that’s all that matters.

Daniel Gillespie says:
27 September 2011

if tesco are dropping there prices then i suggest that we all take the asda challenge as they are guaranteeing they will be 10% cheaper than the other bid 3 or they will refund the difference.

Larry Wedley says:
28 September 2011

But, if Asda were any better than Tesco ‘YOU’ wouldn’t need to take the Asda challenge in the first place – Asda would compare their prices with others on your behalf and make sure they were charging you the correct price at the till – not after you’ve left the store to do a comparison yourself. In my view, the big supermarkets are all guilty of ripping people off.

Alastair says:
30 September 2011

I tried Asda and then took their challenge. They didn’t take into account multibuy offers at Sainsbury’s and, for example, when other shops sold a different brand of oatcakes, they said they couldn’t compare, even though the other brand was cheaper elsewhere.

Asda said I was better off with them – sufficiently so not to merit any refund – but I reckoned I was about evens on balance and Asda is a lot further away so I haven’t been back.

The real savings are at Lidl and Aldi anyway which is where I’m going increasinly often.

Richard says:
28 September 2011

Last Saturday (24/09) I bought a packet of Tesco indegestion tablets (Similar to Zantac) for £1.25. According to their website, these have now been reduced from £1.38 to £1.19 …….. so am I saving 0.06p or 0.19p?

Just had a letter from Tesco informing me that they are dropping back to one point per pound spent (it was two) on the Clubcard in order to finance the “Big Price Drop”. “The lord giveth and the lord taketh away…”

Howard18 says:
28 September 2011

Just received a mail shot from Tesco. Not only are they reducing the price of up to 3000 items but they are HALVING the points from two per £ to one per £.
This will have the effect of allowing the reductions at no EXTRA cost to Tesco.
So those that go to Tesco for the points are now going to be hit because they will not receive the amount expected. New shoppers will benefit.

Malcolm says:
28 September 2011

Tesco want world domination. The sooner their wings are clipped the better. Otherwise, once they achieve that, you who support them will suddenly find there are no cheap prices anymore – and nowhere to go as an alternative. I’d bet the suppliers are once again being squeezed to contribute the money for the price cuts, that’s how it was when I supplied them. Don’t be fooled – Tesco don’t give ANYTHING away that costs them, only if it’s to their advantage – and your long-term detriment.

Mike Mundy says:
28 September 2011

They should also have to show the recent 3000 price increases, including stealth ones where product contents/weight have been reduced.

The proof of the pudding is in the eating…… I’ll ONLY believe if everyday basic foodstuffs like meat,
poultry, fish ecetera (but not including the ‘ready meal’ processed stuff which carries a much higher margin) are meaningfully reduced in price….. you’re better off going to the German discounters that offer far better value for your money anyway, and to local markets/greengrocers for your fruit and veg.

It is not for nothing that a food retailer that raked in profits of a mere 12-14 million in the mid-seventies has become the behemoth it is today in terms of annual profits of 3.5-3.6 billion if not more, AND that shall continue to rise that you can bet your last dollar on….. unless, of course, we concertedly stop patronising their outfits en masse.

Little wonder world’s 2nd richest man has increased his shareholding in the company.

It’s nothing more than a gimmick. If Tesco’s really wanted to save customers money, they would stop printing vouchers and mailing them to people, presumably, hoping people will forget to use them but remember we were sent them. They’d just reduce the price of your next bill by the amount of the voucher they’d have sent you. If they really wanted to help they’d get rid of the word aim in the following “we’ll aim to open another till” you remember that little gimmick. You still queued for almost as long as it took to shop.

Larry Wedley says:
28 September 2011

I stopped shopping at Tesco’s over 3 years ago when times got tough financially for me and my family of four.
Let me say this – Tesco’s has been ripping off the British public for ages and for them to turn round now (4 years into the biggest recession the world has seen for a long time) is just rich.
I am saving around £4,000 a year by shopping at Aldi’s and Lidl’s which equates to around £6,000 in gross salary terms. If you said to any worker in the UK – would you like a salary increase of £6,000 everyone would be estatic. However, there’s no need for a rise – just do your shopping at Aldi’s or Lidl’s and that’s what you’ll save. You won’t be dissappointed in quality either – I say it’s equal to if not better than Tesco’s.
Tell me this – how can Tesco (with all their buying powers) charge £1.53 for 4 pints of Milk when Aldi / Lidl sell it for £1? I’m saving £150 a year on Milk alone – most people would only expect to save that sort of money if they changed their ‘energy’ supplier. And this is just one example – I can give many more. No, Tesco’s is a rip off.
They say in their slogan – ‘Every little helps’ but they’ve missed out the word ‘Tescos’ in that slogan. It should read ‘Every little helps Tesco’s’ to be accurate.

What all load of old balloney by Tesco, once again.
Should Tesco ever begin to take ‘being fair’ with the consumer honestly, they would CUT their prices even more!
How can they do this?
Simple, don’t take the lead from competitors, but look at the cost paid by Tesco for EVERY product, and set the PROFIT MARGIN to just 5%. Then we the consumer might see some real difference.
Tesco New Slogan: “Every little helps, but bigger cuts help even more”

sussexking says:
28 September 2011

This Company have been allowed to infiltrate every town, City & countryside, with multiple stores in many cases and have ridden roughshod over the smaller retailers and suppliers, let alone local planning authorities etc..
I would not shop with them even if they reduced every item in their stores, as they would still find some way to recoup their profits from Joe public, through their other many and varied interests.

It’s good to see people are not being duped with this ‘promotion’ which it undoubtedly is. If Tesco can genuinely afford to reduce by 50% and still be happy, then what are the normal markups? These are FMCG products which carry low margins by the nature of what they are. It seems to me that all their products should be carefully checked out before purchase if possible, this event has simply put me more on guard. To conclude, how many people have been excited for months now by Tesco’s wine prices? I am heartilly fed up with just about all brands being “half price” — how naive do they think people are?

Alex Annand says:
28 September 2011

It doesn’t happen now (I don’t think), but Tesco used to say in small print that 2.5% of the bill was a Credit Card charge, which would be about right. I presume that this level is still about right ~ but Why do people who pay cash have to pay the same 2.5% ???!!! Surely, if they have the cash available, their bills should be reduced by 2.5%.
To my son, who is mentally disabled and has to live on a shoe-string (unless I pay!), this 2.5% represents a £3.00 saving on his weekly shop of £120.00 ~ maybe he could afford a luxury item for a change!

David Lindsay says:
28 September 2011

I am not sure if this practice still happens, because I have not bothered to look that closely at a receipt recently, but it was certainly not limited to Tesco. I think it is/was a simple device to reduce the companies VAT liability since “service” charges do not attract VAT:
– you pay £120 in cash, company gets £100, HMRC get £20
– you pay £120 by card, company credit card service gets £3, company gets £97.5, HMRC get £19.5
Of course I could be wrong…

As for this offer from Tesco, who is paying for it, Tesco or their suppliers? I suspect the latter.

Doug Shorey says:
28 September 2011

All retailers are traders and they make their money my buying goods as cheaply as possible and selling them for as much as possible. In addition the food supermarkets in particular try to create the illusion that they are on the side of the customer which they like us to believe. However, their true loyalty is to their shareholders, not their customers.

In many cases the food retailers take in money from customers on the check outs before they have paid their suppliers. Therefore they are tremendously cash rich which they choose not to mention. Regrettably I regard the latest comments from Tesco as a pure marketting ploy and it is unlikely any customers will be better off in the longer term

Its just another big con by Tescos and a clever stunt to get everbody in looking for bargains!
Then when they are already in store unable to find any bargains, they will do their weekly shop at Tescos instead of elsewhere ringing up even more record profits and fat cat bonuses..!!!
for the big fat chief execs.!!!
Avoid being ripped off and do what i did. Have a look and if things are still dear walk out with an empty trolley and do your shop at the smaller chains such as Iceland and Aldi.

[Edited slightly by mods to remove caps and reference to specific shop]