TESCO ADMITTED yesterday that it increased the prices of about 250 products in the first part of this year before reducing them again ahead of a price promotion campaign it launched on Monday.
It also provided The Irish Timeswith an additional list of 1,000 products which, it claimed, had gone down in March, but had not been put up in price earlier in the year. The retailer's marketing director, Kenny Jacobs, said this list was the central plank of its new promotion
However, when it was pointed out to Mr Jacobs that a number of products on the list, including Flahavan’s Progress Oatlets, Coors beer and Bon Maman conserves, had actually increased in price before falling back, it was withdrawn and he offered to provide a revised one.
He rejected claims from a number of industry sources that Tesco Ireland had increased prices on thousands of products in the first two months of the year in order to boost its bottom line ahead of the end of its financial year on February 28th. He said he was not in a position to talk about Tesco Ireland’s ongoing refusal to disclose the profit margins it makes in the Republic of Ireland.
Mr Jacobs also declined to comment on a report in the retail trade magazine Checkoutyesterday that said Tesco had increased the price of about 8,000 products in its stores in the first two months of the year.
The retail giant was asked to clarify its price promotions policies by MEP and food policy expert Mairéad McGuinness after a report in this newspaper found it had increased the prices of some well-known products significantly just weeks into the new year before reducing them as part of its 1,000-product price promotion.
“There appears to be a yo-yo effect in relation to Tesco’s pricing policy,” Ms McGuinness said. “It is extremely difficult for consumers to keep track of movements in prices and to know whether they are actually getting real value,” she added.
She said it was “important for consumers to know whether Tesco actually takes a reduction in its profit margin in favour of offering value to consumers or whether Tesco, because it is a very large retailer, puts pressure on its suppliers to supply goods at lower cost”.
In response, Mr Jacobs said the pricing initiative was fully funded by Tesco. “We are paying for this out of our margins,” he said.
While he declined to comment on the report of about 8,000 price increases in the first two months of the year, he accepted there had been a large number of increases and said many were as a result of products coming off promotions in the post-Christmas period.
