Tesco goes up against discounters
Published:  22 March, 2016

In an effort to tackle the rising prominence of discounters such as Aldi and Lidl, supermarket giant Tesco is introducing seven sub-brands covering meat and poultry, as well as fresh produce. The new brands will comprise 76 products.

These brands will be channelled through what Shore Capital described as “seemingly fictional farms”. The sub-brand for pork products will be branded under Woodside Farms, while chicken products can be found under Willow Farms. Meanwhile, Boswell Farms will be the fictional farm representing beef.

“Over the past 18 months we have been simplifying our ranges, launched Brand Guarantee and improved customer service,” said a spokesperson for Tesco.

“However, we know customers want the convenience of getting all their shopping in one place. These seven new brands, which are exclusive to Tesco, address our customers’ needs for quality fresh food, at very competitive prices in a single shop.”

It is hoped that the launch of the fictitious farm brands will help Tesco go head to head with German discounters Aldi and Lidl, after Kantar Worldpanel reported the latter increased their market share.

Shore Capital said that the sub-brands were part of a process to reduce the price differential with the limited assortment discounters (LADs). A statement from the investment group said: “In structurally narrowing the gap with the LADs on everyday lines, noting Aldi’s tub-thumping language that it will never be beaten on price, albeit applying skullduggerous tactics in price comparisons in recent times, Tesco will, we sense, be hoping to gain a little more of the basket spend of its existing shopper, while in time seeking to attract some new ones.”

However, the National Farmers' Union (NFU) said that it is "vital" that shoppers have accurate and clear labelling as to the origins of their food so as not to mislead customers.

"The NFU is seeking assurance that Tesco’s new branding on selected food products is accurately and clearly labelled as British," said the Union's chief food chain adviser, Ruth Mason.

“We recognise that Tesco has chosen to brand these products with fictional farm names – a marketing technique practiced in Aldi and Lidl on selected product lines. There will inevitably be shoppers who are led to believe that the fictional names of the farms are the real source of the product - this makes the need for clear and accurate origin labelling even greater.

“The NFU believes that connecting both children and adults with where their food comes from is extremely important - this all starts with the NFU’s Back British Farming campaign."