News: Promotions at record levels at Tesco

Tesco is this week introducing nearly 1,000 new promotions into its stores – countering the latest claims by researchers that BOGOFs and price promotions are in decline.

The supermarket giant said the move would mean it had 9,000 products on promotion – more than it had ever had before at one time – ranging from half-price to “buy one get one free” (BOGOF).

Tesco’s chief executive, Sir Terry Leahy (pictured), announced the increase in promotional activity yesterday as part of the publication of the group’s annual review and financial statement. “I believe we are entering the kind of market conditions where Tesco’s strengths stand out, where customers will be looking to us to help them cope with higher bills for mortgages and fuel as well as higher taxes,” he said.

“To help customers get through these tougher economic times, we have invested heavily in cutting prices and done some great deals with our suppliers to bring the cost of shopping down further.

“Despite inflation on some food products, Tesco has through lower prices and special offers already saved customers £400 million in less than three months this year and now we are going further. This week’s new offers mean that Tesco now has more than 9,000 products on promotion – the most number of offers at any one time in our history.”

Tesco’s tactic is at odds with analysis of the latest quarterly Bellwether Report from NTC Economics and the Institute of Practitioners in Advertising. Reporting a revision downwards in budgets for sales promotion, author Chris Williamson stated last month: “Sales promotions are set to see the weakest growth for at least eight years, reflecting the need to withdraw discounts and offers as companies battle with rising costs.”