Friday 14 January 2022

Tesco Commits To Keeping Prices Down, With Help Of Suppliers

The pledge by Tesco – echoing that of Sainsbury’s, Lidl and Aldi in recent days – suggests the sector faces a price war at a time when suppliers are looking to pass on higher commodity and supply chain expenses.

Tesco stated that it will try to mitigate inflation for consumers through its cost-saving programme. The retailer also plans to buy stock in larger volumes and vowed to work collaboratively with suppliers to keep down prices.

NamNews Implications:
  • One could say that in keeping prices down for the past 10 years…
  • …state-of-art retailers have exhausted all slack in the efficiency system…
  • …meaning there is little further scope for squeezing savings.
  • Besides which, as suppliers know, scale purchasing can rarely translate into significant price discounts..
  • Meanwhile, with very real inflationary costs already in the system…
  • …the market has to move prices in tandem, obviously by instinct rather than by discussion.
  • In which case, it only takes one retailer holding back on price increases to gain a real competitive advantage…
  • (Say a discounter large enough to lower profits at the expense of its global portfolio)
  • i.e. Hold onto your hats, folks!

#Inflation #Competition #SupplierFairShare #GSCOP

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