Sainsbury's boss fires warning at Tesco

Sainsbury's boss Justin King is not pleased with main rival Tesco. King claims Tesco's new price promise, covering both branded and non-branded goods, doesn't stack up against Sainsbury's own branded products.

King is so incensed with Tesco he's threatening to report his arch rival to the Advertising Standards Authority.

Price Promise Mark 2

"How on earth do you compare non-brand products?" King is quoted in the Guardian. "We don't think you can compare the strength of our own brand label with the cut price versions at Tesco and Asda." He went on: "You can be sure we will be pointing out to Tesco where we believe our products are non comparable with theirs."

Tesco's new Price Promise - remember its previous disastrous Big Price Drop when Tesco was found to have pushed prices higher just before announcing discounts? - promises automatic compensation vouchers if your goods could have been bought cheaper in other supermarkets (though not all).

Voucher hope

The Tesco promise is also on promotional and buy-one-get-one-free deals (BOGOF). However, remember that this price promise is still given in vouchers, not hard cash. Tesco's offer, also, does not compare with those two increasingly popular budget options, Lidl and Aldi.

"We're the first major retailer in the UK to compare our prices against the branded and own label prices of our competitors and give customers an automatic coupon for the difference," says Tesco.

But Sainsbury's has reason to be confident currently. Yesterday it released like-for-like sales figures that showed a +3.6% hike in sales in the last quarter. The like-for-like sales stats are important because they include stores open at least a year - a good indicator of growth once the novelty factor of a new store wears off.

Rival trouble

When compared to Morrisons, Sainsbury's upturn looks even stronger. (Sainsbury's claims an extra 800,000 transactions a week, while Morrisons experienced a 400,000 transaction fall).

But with all these Price Promises around, some consumers might think 'so what'. Asda has its Price Guarantee. Morrisons has its Price Crunch campaign. Sainsbury's has its Brand Match. Even Waitrose has a Brand price match.

Are vouchers from Tesco enough to draw people back? Or would you simply prefer better value and decent quality prices every day (when, for instance, did Aldi make a big thing over new price cuts?).

Remember, too, that special price promises are paid for by the supplier, not the supermarket.

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