UK supermarket Tesco says it has seen sales of its premium, organic and fair-trade products return to growth this year, as special offers on top notch goods convince shoppers that they are good value for money.
As the global recession affects shopping budgets, there is a tendency for consumers to trade down from premium to mainstream ranges to shave a few pennies off their grocery bill.
But Tesco said it conducted a range review of its top line, organic and Fairtrade foods, which led to it introducing new deals – and subsequently encouraged some customers not to trade down.
The indication is that consumers are chasing value, and are prepared to accept smaller savings if they can still be goods they perceive to be higher quality.
Examples of deals Tesco has been offering include a ‘Finest meal deal for two’, which is made up of a starter, a main course, a dessert and a bottle of wine – all for £9. It has also been offering ‘buy one get one free’ deals (popularly known as BOGOF) on Finest and organic products.
Consequently, Tesco says its Finest products in the convenience, fish, meat and poultry categories are now back in growth, at a rate of 3 per cent, and organic produce sales are up 52 per cent since last November.
Sales of Fairtrade products are said to be up by 15 per cent in the last year.
The view from Tesco follows a survey by marketing consultancy Cohn & Wolf last week which indicated that consumers will be less likely to buy premium and ethical foods after the recession.
Sixty nine per cent of shoppers asked said they plan to buy less organic food after the recession; 61 per cent said they would pay less for ethically sourced foods; and 73 per cent said they would look to pay less for premium private label goods.
Tesco says its findings “fly in the face” of the survey results.
Tesco has developed a multilayered approach to its customer base, with a number of private label ranges to appeal to consumers with different levels of spending power. In parallel with its ‘Finest’ range, it also launched a ‘Discounter’ line last year.
Stephanie Stewart, senior marketing manager at Tesco said: “While much has been made of us introducing our successful Discounter range last year, we have not taken our eye off other brands and ethical ranges and through improved offers we are now starting to see sales rise again.”