The FT headline spoke volumes in saying "Vouchers flatter Christmas at Tesco" as the UK's top supermarket chain was forced to come clean on the impact that issuing £100m of money-off vouchers to Clubcard members had on its growth.
Taking away the £34m extra spend covered by vouchers, its like-for-like growth dropped to 4.1 per cent and behind that achieved by Sainsbury. One analyst told the FT, the fact that less than half of the extra vouchers were used looks disappointing to us.
For local shops, the small print needs careful scrutiny. That £34m is money invested by Tesco itself in winning shoppers. It is on top of the extra promotional funds that it has secured from suppliers of big brands. It is on top of the margin it has squeezed out of many suppliers. (One service supplier I spoke to at Christmas said that he had to do 20% more work for Tesco last year to make the same money as the year before!)
The PR war from the big supermarkets is being backed up with serious money. For local shops, this means that competition will continue to be tough as the supermarkets tell shoppers that they are their best friends. The marketing works because once they get people in store, they are very good at getting people to buy more than they planned - which means less money for other shops.
There are lots of ways that local shops can respond. It would be good to hear which ones are working well in 2010!
Taking away the £34m extra spend covered by vouchers, its like-for-like growth dropped to 4.1 per cent and behind that achieved by Sainsbury. One analyst told the FT, the fact that less than half of the extra vouchers were used looks disappointing to us.
For local shops, the small print needs careful scrutiny. That £34m is money invested by Tesco itself in winning shoppers. It is on top of the extra promotional funds that it has secured from suppliers of big brands. It is on top of the margin it has squeezed out of many suppliers. (One service supplier I spoke to at Christmas said that he had to do 20% more work for Tesco last year to make the same money as the year before!)
The PR war from the big supermarkets is being backed up with serious money. For local shops, this means that competition will continue to be tough as the supermarkets tell shoppers that they are their best friends. The marketing works because once they get people in store, they are very good at getting people to buy more than they planned - which means less money for other shops.
There are lots of ways that local shops can respond. It would be good to hear which ones are working well in 2010!
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