Tesco: 66 points for Dave Lewis – No.25 – Bebivita

Today is 42 (forty-two) days until Dave Lewis takes the helm at the UK’s biggest retailer. Grocery Insight are counting down to the start of his reign with an improvement point per day. Due to the growing nature of the list causing issues with our template, please click on Tesco to see all the posts containing the 66 ‘to do’ points. Today we consider European PL – Bebivita.

It was never the intention for the ’66’ to cover branded products exclusively, however this example does show what a chaotic place Tesco can be to shop in from a customer viewpoint. Nor does this example help the price point either.

So, Bebivita is a European baby brand that was dropped into Aldi some 2/3 years ago, no one questions the quality as its good and obviously Aldi only sell one type of baby food (save for some Heinz) so customers assume its another private brand. It isn’t and I was surprised to see it in Tesco this week, forming part of their ‘brand outlet’.

The issue in stocking brands that Aldi also stock is that its not a path to prosperity, if anything it only serves to highlight the price differential on these ‘branded goods’.

Aldi will always be cheaper – see the Lettuce down to 49p at Morrisons, 45p at Aldi a day later as an example. So what is the benefit of stocking this range in Tesco? Customers don’t cross the road to Aldi solely for Bebivita, it forms part of the range and ticks the box for the customer, but its not a destination range.

The issue with ranging directly comparable lines is the price gap is there for all to see. Where Aldi private label is cheaper than competing retailers, there is also a quality jump helped by the limited range, major retailers can point to ingredients being different etc. You can’t escape such comparison when ranging the same lines.

A large jump from Aldi charging 42p/49p for their jars to 70/80p, c. 48%/59% increase for shopping in Tesco down their ‘brand outlet / bargain zone’. “Scrumptious Sunday Lunch” for example – 49p in Aldi vs. 80p in Tesco. Crazy.

Someone on Twitter suggested it could be price establishment, but why price establish on a discount aisle? Price gaps like this erode trust and encourage price perception issues. Aldi are cheaper (with a solid quality offer), if you’re Tesco, its unwise to highlight this so explicitly to customers.

For Dave Lewis, these own goals need to be looked at. The brand outlet appears to have some decent prices, but 5pk Walkers for a £1 when 6 pack Walkers are on 2 for £2 on the main aisle demonstrates poor value and a lack of cohesive thinking. Like separate businesses under one roof.

Good value for money has to go  far beyond half / one aisle of brand outlet merchandise. It has to be everything.

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Grocery Insight provide market insight on the UK sector with a focus on individual retailers such as Tesco. This insight is useful to various stakeholders and due to my store based focus. Insight can be delivered to suppliers to focus on growth opportunities, analysts and investors to assess the business performance and long term outlook and retailers themselves to assess best practice.