One retail expert has claimed that, in the wake of today's news regarding Tesco's drop in profit and sales through the first half of the year, the UK-based retailer has lost the trust of its customers.
Professor Chris Edger, business and retail expert from Birmingham City University (BCU), has said that Tesco has suffered when compared with the competition.
“Essentially, over the last six years, as Tesco has milked its UK business to fund foreign adventures it has – as the CEO has remarked – lost the trust of customers” says Professor Chris Edger, business and retail expert from BCU.
Professor Edger claims that the main downfall for Tesco has been the lack of transparency in regards to its pricing strategy.
“Back in the day, customers felt that they were – on balance – getting great value from Tesco on their food purchases,' he says. 'However, the Hi-Lo strategy it has pursued over recent times, bouncing products in price to both ends of the spectrum, has led to confusion amongst customers.
“Asda, on the other hand has – it can be argued – been far more transparent and consistent on pricing; regularly winning The Grocer’s weekly basket price challenge and transmitting an honest message (which is backed up with action) to its customers on value.
“In terms of direct competition Asda, (more latterly) Morrisons and the hard discounters shout EDLP (everyday low price) in a transparent manner,' he says. 'They are not opaque, in the sense, they hike-crash-hike again or use loyalty points systems as a confusing tactic to give customers the perception of value. No, they are fighting on straight transparent pricing platforms. And that is where Tesco needs to regain the trust of its customers.”
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