The trouble with Tesco

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Tesco - a brand to trust? Hmm, Not in my opinion.

Tesco as a business isn’t doing badly. It’s profits are still huge, even if they are slightly down on previous quarters in the UK.

But for me, this is masking a much bigger brand problem and that is because nothing they offer is special any more. They don’t make customers feel valued, they don’t surprise or delight us, they just keep chipping away at prices by chipping away at suppliers who have no choice but to chip away at the quality.

We have always believed that the way a brand should behave is to decide a price and then see how good you can make the product for that target price. To me, Tesco look like they are aiming to produce all of their goods as cheaply as possible and not seeing how good they can make them for the money.

This is a short term profit boost that leads to long term decline.

Look at the section with motoring and cycling products. If you are even slightly into either pastime, you will see that what they are selling is utter crap and not cheap either. This is one tiny category in a huge store, but it’s reflection reaches far and wide in perception. If everything in the store is as badly produced and as nasty as this, why would I trust the brand overall?

Unless they up their game, start focusing on quality again and start treating their customers as intelligent individuals who do have a choice, this will be the first of very many profit warnings to come.

Why Tesco want a minimum price for beer

Tesco - Every little (piece of government intervention and price fixing) helps
Tesco - Every little (piece of government intervention and price fixing) helps

Maybe I’m being simplistic, but to me it seems pretty obvious why Tesco are campaigning, along with the government, for a minimum price for beer.

They’ve never behaved altruistically before, I hear you cry!

Well, they’re not now either.

It is pure self interest.

If there is minimum retail price for beer in the UK, do you honestly think that will affect their buying price in any way at all?

No me either.

With the huge growth of global beer brands such as AB InBev, who own the likes of Stella Artois (wifebeater), Budweiser (simply vile) and Becks (iced water), it will allow tesco to do even better deals and grow their buy/sell margin to an even greater level.

Yes, the smaller retailers will have some protection as they will still be able to get their £3 for a four pack, but they’ll be paying £2.40 to Tesco’s £1.20 from their supplier and yet again the little man is crushed.

Beer brands are going through a mad level of consolidation and whilst I have written many times before about a brand backlash and choosing guest ales over the mega brands when we visit our local, it seems that more casualties are coming.

With Bass, Boddingtons and Flowers all up for sale by AB InBev, it seems that we will have fewer and fewer big regionals and be left with globals at the top and tiny locals at the bottom.

This has to present the most amazing opportunity for a decent entrepreneur in the middle ground to buy up one of those three amazing beer brands and build them back up again.

I’d be happy to help with the branding! (and tasting if required)

Updated

It would appear that the Bass brand isn’t really up for sale. In this great article by Pete Brown in the Publican, he gets to the root of what is really for sale. What AB InBev are actually selling is the UK only rights to sell the beer as a draft product. No rights to the name, no rights to the International business and no real chance of anyone being interested in that particular offer. What a real shame for beer drinkers. I certainly didn’t know that Bass and the famous red triangle was the first trademark in the UK. Globalisation isn’t really a good thing is it? It just makes it easier for our historical brands to be destroyed internationally, ignoring all the years of heritage they have created.