Tesco Hits Back at "Rip-Off Britain" Claims with Price Comparison Study

Strategic Insights -

Tesco, the UK's largest food retailer, is publishing research today that reveals its prices on essential food items are 8% lower than the European average. The study, conducted by ACNielsen, compared Tesco's prices with those of leading chains in France, Germany, Italy, the Netherlands, and Belgium. The research found that out of a typical basket of 131 essential food items, around 50% was not directly comparable due to differences in size or weight. However, even with these discrepancies, the study shows that Tesco is 8% cheaper than the European average, with some products up to 20% cheaper.

Key Takeaways:

  • Tesco's prices on essential food items are 8% lower than the European average, according to a study by ACNielsen.
  • The study compared Tesco's prices with those of leading chains in France, Germany, Italy, the Netherlands, and Belgium.
  • Out of a typical basket of 131 essential food items, around 50% was not directly comparable due to differences in size or weight.
  • Even with these discrepancies, Tesco was 8% cheaper than the European average, with some products up to 20% cheaper.
  • The study suggests that the cost of food in the UK is beginning to come down largely due to price-cutting campaigns by supermarkets.
  • UK supermarkets have a higher proportion of own-label sales, around 35%.
  • The white paper proposes measures to improve price transparency, including setting computer kiosks in shopping centres.
  • Retailers have been stung by ministers' claims that many UK consumer prices are higher than in other European Union countries and in the US.

Statistics:

  • 8%: The price difference between Tesco and the European average for essential food items.
  • 20%: The price difference at which some products were found to be cheaper at Tesco compared to the European average.
  • 50%: The proportion of essential food items that were not directly comparable due to differences in size or weight.
  • 131: The number of essential food items in the typical basket compared by ACNielsen.
  • 35%: The proportion of own-label sales in UK supermarkets.

Sources:

  • Tesco's price comparison study, conducted by ACNielsen, published in the Financial Times.
  • The Consumer White Paper, proposing measures to improve price transparency.
  • Arthur Andersen's study on UK electrical goods and personal computers prices.