Tesco has leapt to the defence of its newly introduced Farms range, which uses the names of fictitious farms in a bid to heighten the quality of its products, arguing that consumers don’t get enough credit for how marketing savvy they are.
The introduction of the 76 new lines, split equally across fresh produce and meat and poultry, are a play by the retailer to convince more consumers to do a full shop at Tesco, rather than hunting bargains by shopping at its competitors.
Speaking to investors today (13 April), Tesco chief executive Dave Lewis said that the seven new farm names, which include Rosedene and Nightingale, have been created to stand for “a consistent offering of quality and value” and fit in to the model of traditional food marketing.
“Some of the commentators don’t really give any credit for how marketing savvy some UK customers are… Do they know that one single farm is not big enough to be able to supply Tesco? They do. Do they know that one single farm does not supply everything across all product forms? Yes… what was really important to them was do they come from farms? Well clearly they do.
“When you look for a brand name you look for something that can stand for a consistent offering of quality and value. We are not the first and I suspect we won’t be the last where we have chosen to use a brand name. We have been very open about the fact that is creation and we are creating and launching these brands… If you look at the history of food marketing in this country that is exactly the model that allows for consistent branded value equation in how you build a brand and that is what we did here.”
Lewis added that more than 95 per cent of customer feedback for the new brands “is neutral or positive” and said that since launch the results have been encouraging.
The retailer has reason to rejoice after reporting the first quarterly sales growth in three years, with profit for the year hitting £162m and UK like-for-like sales up 0.9 per cent. This follows last year’s epic £6.3bn loss.
Tesco credited the improvement to a 3 per cent cut it made to the prices of an average weekly shop last year as well as an 18 per cent cull of the products it sells, a move which saw the retailer cull brands including Carlsberg, Ribena and Kingsmill in a bid to streamline the shopping experience.
UK transactions jumped by 2.8 per cent in Q4. Tesco also gave out 37 per cent less coupons and ran a third less multibuy promotions compared to last year.
“Everything we said about simpler, lower more reliable prices is what has been driven through this year… and the feedback is that it is better, simpler to shop and more appropriate for what they want,” added Lewis.
Going forward, Tesco said it will focus on ‘removing reasons to shop elsewhere’, meaning the retailer will continue to invest in the aspects of that differentiate its brand from competitors and discounters, with initiatives such as its Brand Guarantee, which refunds the difference of branded products should it be cheaper at Asda, Morrisons or Sainsbury’s.