New Tesco offers will catch customers on pay day

Simon Evans
Sunday 22 February 2009 01:00

Tesco is to roll out a new “pay day” discount strategy to consumers struggling with the effects of the credit crunch.

It is believed that the UK supermarket giant will launch a raft of offers targeting shoppers at the time they have the most cash in the bank, at the end of the month.

A City source said: “This is a smart play by Tesco. Having bought out RBS from its Personal Finance venture, it is in a great position to look at financial trends. Many of its customers are obviously struggling and this is a way to get them to spend a little more when they are feeling flush.” It is thought that discounts will focus on household items – “things that you might baulk at buying at other times of the month”, the source added.

James Monro, retail analyst at S&P Equity Research, said: “I think this strategy is an attempt to stop those consumers on the cusp of trading down out of the Tesco brand into rival stores. It may also lead those who shop in Tesco for cheaper items to spend more at the end of the month at the discounted prices.”

Tesco launched its discount range in September last year in an effort to stop customers turning to low- cost rivals such as Aldi and Lidl, which have prospered recently.

UK sales at Tesco grew by 2.5 per cent over the key Christmas trading period – its worst performance since the last recession in the early 1990s.

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