Tesco's decision to charge just pounds 30 for Levi 501s compared to prices of over pounds 50 in Levi's own stores, brought an angry reaction from Levi Strauss and could prompt other retailers to join a price war in the battle for the "denim pound".
Tesco's move to start selling Levi 501s in 128 of its supermarkets this week was made without Levi's permission, as the jeans giant said it did not consider supermarkets an appropriate place for its products to be sold. Levi's spends millions advertising its jeans which it promotes as stylish fashion essentials aimed principally at a teenage audience. It regards its jeans as too sexy to be sold alongside the frozen peas and loo rolls in a supermarket.
The move to cut the price of jeans is just the latest in a series of assaults by supermarkets on goods it regards as over priced. Other targets have included books, medicines and compact discs.
Levi's refusal to supply Tesco has forced the supermarket to go direct to an official Levi supplier in Mexico where it has secured a supply of 45,000 men's 501s. It immediately claimed the moral high ground saying the price of some branded goods were often to high. "Tesco aims to bring the best products at unbeatable prices," Tesco director Simon Unwins said. "Unfortunately some brands try to restrict the market and force customers to pay a higher price. We believe that is unfair."
Levi's denied that it tried to control prices. "We absolutely have no desire to set retail prices. It's a matter for individual stockists," a spokesman said. However, it does have strict criteria which stockists must meet. These are that staff should be extensively trained in the subject of "jeanswear", that there should be a clearly delineated Levi's area and a range of styles at different prices.
Mark Elliott at Levi's said: "We are concerned to make the shopping environment as pleasant and appealing to customers as possible. There are objective criteria which stores must meet, and they [Tesco] didn't meet them." Tesco has only managed to secure a supply of men's button-up fly 501s in stonewash red, black and yellow. It has paid pounds 25.62 per pair so charging pounds 30 still gives the supermarket a mark up of 15 per cent.
Levi's said it was concerned that it could not verify the source of the Tesco jeans and is investigating the matter. However, it said it would consider supplying Tesco if it modified the way it sold the jeans.
Levi's denied that image was involved. "We stock a wide variety of outlets, from department stores to mail order, all with a very different feel, because our customers want to shop in different environments. But department stores have a clear ring-fence around their jeans, and the staff are expert in selling clothes. That's the environment we're looking for."
Business comment, page 25
The cost of legging it
Freeman's mail order pounds 54.99 pounds 54.99
Littlewood's mail order pounds 54.99 pounds 54.99
Official Levi's Store, Regent St pounds 52.00 pounds 52.00
Selfridges pounds 49.95 pounds 49.95
Jeans West, Oxford Street pounds 44.99 pounds 44.99
Grip, Gt Marlborough St pounds 44.99 pounds 44.99
John Lewis, Oxford Street pounds 37.00 pounds 39.00
Atomic jeans, Oxford Street pounds 35.00 pounds 35.00
Tesco (men's only) pounds 30.00 -Reuse content