Tesco revives top brand price battle
Thursday 29 January 1998
Tesco has bought more than pounds 8m of Nike trainers and sports clothing on the "grey market" and will offer them at cut prices from today. More than 220 of Tesco's stores will stock a full range of Nike merchandise including trainers, sweatshirts and shorts.
Under the slogan "Tesco - Just do it for less", it has cut the prices of the popular designer label by more than half in some cases. The best bargain is Nike Ladies' silver Trimax, which are reduced from the normal pounds 120 to pounds 50. Men's deep marine Air Max Triax trainers have had their price slashed from the typical pounds 80 they cost on the high street to pounds 45.
"It is outrageous that British shoppers are being forced to pay over the odds for many branded products," said Tesco's director John Gildersleeve. "Nike is not alone in operating a selective distribution system. It is an unfair system and we are campaigning for changes on behalf of our customers." The Consumers' Association welcomed the Tesco move, saying that it was clear that some manufacturers were using anti-competitive behaviour to keep their prices high.
Tesco says Nike is just one of many companies that effectively maintain high prices by restricting supplies and refusing to deliver to supermarkets. Last month Tesco made a complaint to the Office of Fair Trading against Levi Strauss and Calvin Klein over selective distribution practices.
Last year Tesco angered Levi's by securing supplies of its jeans through the grey market, which are distributors and other middle men who gain supplies of excess stock. Levi's claimed that supermarkets were not an appropriate environment in which to sell its products. The jeans giant said stores should have staff that could offer specialist advice on the garments.
The big perfume manufacturers used a similar argument against Asda, which this week announced it had acquired pounds 3m worth of perfume and would cut the prices by up to 60 per cent. Asda said it was a permanent move to sell perfumes at realistic prices.
Asda has also attacked resale price maintenance on over-the- counter medicines such as vitamins and headache tablets. That issue is due to be decided by the Restrictive Practices court, though a decision is not expected until next year.
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