Battle lines have been drawn this week between Tesco and Sainsbury’s, with Justin King, blasting Tesco’s Price Promise scheme.
Citing Sainsbury’s strong track record on provenance, especially in areas such as MSC-certified fish and high-welfare meat, he insisted that it is impossible to compare own-label products. And Sainsbury’s has written to Tesco to complain about its comparison of several specific items.
Sainsbury’s commercial director Mike Coupe said the only comparable products are “barcode-for-barcode brand matches”.
Tesco has laid out how it compares own-label products on its website, referencing criteria such as ingredient mix, country of origin and pack sizes. But it will have to respond to Sainsbury’s complaints with a comprehensive answer or the Advertising Standards Authority will get involved.
Tesco’s Price Promise is innovative, and that’s why it has ruffled feathers. Own-label growth has been strong for all the big grocers - Sainsbury’s has reported own-label growth of 9% for its relaunched By Sainsbury’s line - and having a price promise that includes those products is very valuable for the customer.
But whether or not the own-label element of the scheme survives, the Price Promise is also innovative because it includes online shopping. Sainsbury’s scheme, by comparison, only offers vouchers to customers in stores.
Being truly multichannel, or omnichannel, means shoppers should not see a difference between a retailer’s sales channels. And if you’re offering store shoppers a certain price promise, it seems crazy that the same is not offered online.
Tesco has clearly set out its agenda to become a leading player in multichannel, and if Sainsbury’s and the rest of the big four don’t want to fall too far behind, they need to address these issues. But, for now, we should expect some wrangling over the own-label debate.