With the food and drink retail sector being the largest industry in the UK, it couldn’t escape being effected by the recent economic crisis of the recession. Consumers were forced to change their buying habits and start budgeting; the front runners in the industry had to pay closer attention to their strategies in order to stay ahead in the market. It is now time for supermarkets to research and evaluate the strategic options available to them which will in turn be best for their consumers and to take on their competition. Harvey (cited in Asch & Wolfe, 2001, pp.60-61) concluded that competition should not be judged in terms of the relationship between prices and costs at a point in time but rather in terms of the capacity to innovate over time leading to longer-term gains in quality, convenience and price. This report will establish how Tesco successfully manages to do this through its chosen strategic options in the current economy, dominating the middle mass market as can be seen in the graph below.
Profile of market leaders’ customer bases (Perks, 2010)
2. Current Positioning
Tesco is the UK’s biggest supermarket chain and has a dominant share in its market and has done so for more than 10 years. With this being the case it has a large customer base at hand for monitoring and analysing. Tesco’s core value is to “create value for customers to earn their lifetime loyalty” (Tesco PLC, 2010). They also value the thought that no other company tries harder for their customers and so their marketing strategies and objectives are developed to work around these values in order to ensure that they don’t let their customers down.
3. Tesco’s Current Strategies 1. Tesco Clubcard
The Tesco Clubcard retains their customers and attracts new ones, in 2009 Tesco re-launched this initiative as a result in the shift of their strategy, one of their marketing planning directors stated ‘’Tesco has realised
References: Aaker. D.A & McLoughlin. D, 2007. Strategic Market Management: European Edition. UK: John Wiley & Sons Asch. D & Wolfe. B, 2001, New Economy--New Competition: The Rise of the Consumer? Basingstoke: Palgrave. Doyle, P. & Stern, P. (2006) Marketing Management & Strategy. 4th edition. FT Prentice Hall Mills. G, 2003. Retail Pricing Strategies & Market Power. Melbourne: Melbourne University Publishing Perks. R, 2010. Food Retailing UK – November 2010. London: Mintel International Group Ltd Strategic Direction, 2008. Tesco’s American dream. Strategic Direction, 24 (2), pp11-15. Reynolds. J, 2010. Waitrose joins low prices fray by targeting Tesco, [online]. Available at: [Accessed 23 November 2010]. Tesco PLC, 2010. Annual Report and Financial Statements 2010, Hertfordshire: Tesco PLC Thomas. J, 2009. The strategy behind the Tesco Clubcard, [online]. Available at: [Accessed 23 November 2010].