Tesco drops 300 wines from range and eliminates half price deals

By Angela Mount

Published: 29 October, 2015

Tesco finally unveiled the full extent of their new range and pricing policy at their autumn press tasting in London Tuesday.

The stated focus of the retailer is to make the shopping experience 'simpler, easier, and better'. As part of this exercise, the range has been reduced from over 950 lines to 650.

However, it's the company's pricing and promotional strategy for wine, which has seen the biggest impact of radical change. As was confirmed by new Wine Category Manager, James Davis, the half price deal is no more, with the wine category moving away completely from this promotional mechanic.

In its place comes a strategy of 'simpler, lower, and more stable' pricing, effectively an EDLP pricing policy on own brand.

Until now, across the many of the mutiple retailers, a premium pricing policy on wine (usually 10% premium) has operated in the majority of retailers for smaller 'convenience' stores, including Tesco.

Core own brand and the 'Finest' range now account for over 50% of total wine sales in terms of value, which has demonstrated to the business that customers trust their own brand proposition, and supported by the company's recent award for the 'best own label range of the year' award at the International Wine Challenge.

From this week, Tesco are stabilising pricing for own brand, including 'Finest' across their estate, making the pricing for a bottle of Finest equal from the largest of their megastores to the smallest of their 'Express' or 'Metro' stores. Shallow discounting and promotional offers on brands and other wines in the range will continue.

Tesco are communicating this change in strategy to customers via in store point of sale, and a clear message that their overall pricing on own brand has now moved to a strong value proposition, from their entry level 'Vineyards' range, which challenges the discounters, Asda and the Morrisons 'Chalkboard' range at £4.00, to their flagship 'Finest' selection, which continues to develop.

The retailer also aims to make the proposition 'operationally simpler' for stores to implement and improve forecasting accuracy. It aims to provide a wider choice of wines at each given price point, making consumers less reliant on heavily discounted deals, with more choice across the range.

In terms of average pricing, based on the wines on show at the tasting, the average price of the multi-award winning Tesco Premier Cru Champagne drops from £19.99 to £18.00, whilst top selling Finest Prosecco moves to £8.00. Across the range the pricing of the Finest range has fallen, with their well-established Finest South African Chenin blanc, from Adi Badenhorst at £5.50, and a Finest Argentina Malbec from Catena at £6.00.

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