Tesco has declared carrots and cucumbers the latest battleground in the fight between Britain’s supermarkets by saying it will invest £200m into lowering the price of everyday food.
In a presentation to investors in the City, Tesco said pricing in the industry has been “too volatile for too long” and pledged to shift investment from confusing promotions to lowering the regular price of key products. This includes cutting the price of carrots from £1 per kg to 80p and one cucumber from 65p to 49p.
Philip Clarke, chief executive, said the strategy is an “acceleration” of Tesco’s work over the last two years and that this is a “transitional period” for the retailer. He said that Tesco is “not attempting to fool anybody” with its new pricing strategy.
Tesco reported a 2.4pc decline in like-for-like sales in the run-up to Christmas and has been underperforming its rivals such as Sainsbury’s but also the discounters Aldi and Lidl. However, in an interview with The Telegraph on Monday, Mr Clarke insisted Tesco has “really strengthened our foundations” since he unveiled a £1bn turnaround plan two years ago and that the company has the “right strategy”.
Mr Clarke said the pace of change in the industry as shoppers move spending online meant that Tesco now had to step-up its plan. However, he admitted that the Tesco brand is carrying some “baggage” and that Britain’s biggest retailer “can’t ignore” the rise of discount chains Aldi and Lidi.
