By in Business

Tesco doing Badly

I watched a programme on television last night about why Tesco have gone from being the United Kingdom`s bet performing supermarket. This year Tesco are threatening to close stores and make thousands of staff lose their jobs. Apparently this is down to several different reasons. One reason is that other discount stores , discount supermarkets and poundshops have become more popular with their customers. Another reason for their downfall is that they were charging their suppliers to stock their products in the Tesco stores.

These suppliers were being charged hundreds of thousands of pounds each year for the use of Tesco shop shelves and displays. The most popular shelves in the shops are at eye level where customers can see these products before they look at anything else, these shelves were really sought after by the suppliers and Tesco were charging even more for these shelves.

All this charging for shelf space must in the end make the products more expensive surely.

Image Credit » My own

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johnnydod wrote on January 20, 2015, 5:37 AM

HI carolyn good to see you

Hollyhocks100 wrote on January 20, 2015, 5:59 AM

Wow, I never knew that, and you do have a valid point, what a rip off no wonder we feel it in our purse.

arthurchappell wrote on January 20, 2015, 6:45 AM

sounds like their greed got the better of them - hope they survive or unemployment figures will go through the roof

LadyTrouble wrote on January 20, 2015, 7:07 AM

I work for a grocery chain but am not sure how it works. I don't think that our vendors and suppliers pay for shelf space. I believe that we sort of buy the food, and the suppliers and vendors sort of set the price. If not set the price, then they set a "you can't ask for less then this" type thing. I think in a way we split the profits with the companies that supply us. So we don't outright buy the product so much as "rent" it.

As for placement, I am not sure that works. Ours is organized by aisles, and I believe that the grocery store company that I work for is whom designs where to display it. We do have what are called "impulse aisles" which are areas of the store, essentially around check out, where the "goodies" are kept, items that a consumer wasn't necessarily there to purchase.

It's sad that tesco may be going under, but perhaps if they change the policies somewhat, they can still stay afloat and recover.

Koalemos wrote on January 20, 2015, 8:14 AM

Many of the large supermarkets employ rather dubious marketing techniques and try to take unfair advantage of their purchasing power.

UK_Writer wrote on January 20, 2015, 8:30 AM

I have other ideas about why Tesco aren't that great. For me, they simply don't stock the sort of foods I am used to, the stuff I've bought from there for years and in the past.
Every time I go into Tesco full of hope, only to find that my basket is empty and I wish I'd gone to Asda emoticon :smile: They thought they were being clever with their shelf price fixing - it's been their downfall.

PegCole17 wrote on February 1, 2015, 11:25 AM

It is always disappointing to discover that a store isn't doing well. Perhaps what you've said about the shelf location and pricing has a lot to do with it.