Tesco becomes first supermarket to directly price match with Aldi
Tesco will hope that by price-matching with the discounter on both own-brand and branded products it can curb Aldi’s growth and win back customers.
The initiative will include both branded and own-label goods such as Tesco whole cucumbers and Warburtons Toastie sliced white bread. Prices of products will be checked twice a week, with those included in the campaign marked out with a distinctive red ‘Aldi Price Match’ bubble on the shelf edge and called out online.
Tesco says the move will offer “Tesco products at Aldi prices for simple, great value”.
Tesco’s chief customer officer Alessandra Bellini adds: “Our customers tell us they want the most competitive prices on the things they buy regularly. This new campaign will help time-poor and budget savvy customers get Tesco products at Aldi prices on products that matter to them.”
The campaign comes after Tesco spent the past 18 months investing in the price and quality of its own-brand goods as it looks to offer a clearer value proposition at various price points. Thousands of lines have been overhauled, including its Exclusively at Tesco brands.
While Tesco remains the biggest supermarket in the UK, with a market share of 27.2% according to Kantar, that has fallen from a high of above 30% as the German retailers Aldi and Lidl have attracted shoppers. Aldi now has a 7.9% share of the UK grocery market, while Lidl is on 5.8%.
The big four supermarkets have cut prices on frequently purchased product lines to ensure their pricing is in line with the discounters. However, they have also relied on their broader offerings – such as petrol stations, a wider product choice and additional services such as The National Lottery or clothing – to draw customers who want the convenience of doing a shop in one place.
Tesco has also looked to boost loyalty by offering lower prices on some products to members of its Clubcard loyalty scheme and introduced a subscription service that offers 10% off two shops worth up to £400 as a means to dissuade shoppers from switching supermarkets.
Aldi, however, has dismissed this latest move from Tesco and prompted concerns over a renewed price war in the supermarket sector. A spokesperson says: “Our promise to our customers is they will always pay the lowest prices on every product we sell.”
Price-matching schemes were widely available at the main supermarkets – including Tesco, Sainsbury’s and Morrisons – as a way to curb the rise of the discounters in the mid-2010s. Tesco previously offered a price guarantee on branded goods but discontinued the strategy in 2018, while Sainsbury’s price-matched against Asda but ended the scheme in 2016 to focus on “offering lower prices”.
Morrisons was the only one of the big four to price match against the discounters, but this was only available to members of its ‘Match & More’ loyalty scheme. All three schemes offered customers points if cheaper prices were found elsewhere. Tesco does not appear to be offering this service this time round, instead using the campaign to drive confidence in the competitiveness of its pricing.