Tesco claims brand perceptions ‘outperforming’ the market

Tesco reports its brand perception metrics are up and market share has risen 77 basis points (bps) year-on-year to 28.4%, with the supermarket having gained share for 28 consecutive weeks.

Reporting its interim results today (2 October), the retailer’s group sales rose 5.1% to £33.1bn. Group adjusted operating profit also increased 1.5% to £1.67bn.

Overall, brand perception rose 96bps year-on-year, with satisfaction up 263bps, value up 89bps and quality up 13bps. According to Tesco, this is “outperforming the competitor average” on all six YouGov measures.

Tesco also reported its highest net promoter score in six years and strong price positioning, reducing the price of over 6,500 products versus last year – with an average reduction of around 9%. The supermarket claimed a five-point improvement in NPS, with quality perceptions up three percentage points year-on-year.

Chief executive Ken Murphy claimed the successes “reflect the decisive action” Tesco took at the start of the year to further invest in value, quality and service.

Back in June, the retailer reaffirmed a commitment to value in an “intensely competitive market”. At the time, Murphy also claimed Tesco has responded “very effectively” to the competition “without dropping the ball on quality and innovation”.

In the latest results, the CEO said “competitive intensity remains high” given continued pressure on household budgets.

Tesco’s strong position was reaffirmed by the latest figures from Worldpanel by Numerator, which reported the supermarket had made the largest market share gains among all the grocery competition.

‘Personalised engagement’

The grocer credited investment in quality across its ranges for helping drive sales, with Murphy reporting the Finest range is now in its third year of double-digit sales growth.

Finest sales rose 16%, with over 300 new and improved products. Tesco’s clothing range F&F also saw strong like-for-life sales growth of 7.8%, while home like-for-like sales declined by 2.1%. Overall, UK online sales rose 11.4% driven by growth in orders per week.

Murphy said Tesco is continuing to drive more personalised engagement through Clubcard. The loyalty scheme boasts market penetration of 84% in the UK and 87% in ROI and Central Europe. Targeted digital coupons have been offered to 10 million customers, as the company continues its trial of Your Clubcard Prices, which gives shoppers lower prices on selected products based on their previous purchase history.

Celebrating its 30th anniversary this year, Tesco group customer director Becky Brock told Marketing Week in March Clubcard is “the fuel that powers Tesco”.

“Clubcard is one of our most precious assets. It’s something we’ve got to nurture. We’ve got to do the right thing. We’ve got to always make sure that there’s that value exchange and trust, which is so important,” she said.

Tesco also saw continued growth in its retail media offering, with over 1,400 screens added to its stores. Video advertising was also launched on the Tesco app and Express store wraps.

Looking ahead, Tesco expects full year group adjusted operating profit between £2.9bn and £3.1bn, an increase from the previous range of between £2.7bn and £3bn.