Tesco re-focuses on poor - and posh

Following its Christmas sales trashing, Tesco is overhauling its store offering. Poorer, more hard-up areas will see much more emphasis on 'value', cheaper products while posher areas will have more hoity-toity, upmarket fare on its shelves.

To some degree, Tesco already follows this approach - but it will be more hard-nosed in future. Enough to bring you back from Morrisons/Asda - or Lidl/Aldi?

Big price flop

"Tesco has begun talks with suppliers aimed at launching price promotions in less well-off areas where it is facing competition from the likes of Aldi and Lidl," reports The Grocer. "It has a list of about 100 stores where it is going to launch special deals at discount prices," The Grocer reported one supplier as saying.

Tesco needs to make changes fast. The company saw its share price collapse by almost 16% in one day following its grim Xmas sales results - £5bn was effectively erased from the company's shares. But many once-loyal Tesco shoppers have been less than impressed by the company's response to surging inflation - its so-called Big Price Drop, which saw the retailer ending its Double Points promotion incentive.

The move effectively saved the company hundreds of millions. The company was also accused of raising prices for a few days before the Big Price Drop in order to claim some savings last year. How's this for a price drop? A Tesco 750g Fruit and Nut Museli went from £1.28 on 16 August last year to £1.89 on 23 August, the Mail reported, before 'dropping' to £1.75 on 26 September.

So, will making certain every-day goods in less well-off areas entice you back to Tesco? Or will you stick with Morrisons/Asda or Lidl/Aldi. Perhaps the damage has been done? Let us know.

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