TESCO DEFENDS IRISH PRODUCTS STANCE - This morning Tesco announces the results of its border price reduction programme, saying the scheme is moving to Dublin and will be rolled out across all of its Irish stores by August.
It joins Marks and Spencer, Dunnes and SuperValu in a massive pitch for the newly money- conscious shopper, as lower-cost operators Aldi and Lidl gain market share.
Tesco is by far the biggest here, with a market share of close to 30%. On the same day it announces price reductions across its product range in Dublin, The Irish Times carries a story about how hundreds of prices have been put back up, following recent, heavily promoted price reductions.
Tesco's chief executive Tony Keohane said the border initiative had gone well - as its car parks were busier and its aisles were fuller. He rejected suggestions that the company had moved some prices back up, saying it had cut 12,500 prices by an average of 22%.
Mr Keohane said Tesco had been able to re-arrange contracts and change its supply operation after the massive moves in the euro/sterling exchange rate.
Asked whether producers were paying for price cuts, Mr Keohane said everyone was paying for them. He said suppliers, as well as everyone else, had had to reduce their costs. He would not disclose Tesco's profit margins for Ireland, saying none of its competitors did so.
Tesco and others came under fire from Irish food producers last week over what producers claimed was reduced shelf space for Irish products. But Mr Keohane denied Tesco had reduced its reliance on Irish producers, saying it was a 'massive supporter' of Irish agri-business.
But the Tesco chief said the company looked at all product lines it carried - Irish and international. He said the products customers were buying remained, but those people were not buying were removed. Mr Keohane said it was 'completely erroneous' to suggest that Tesco did not carry Irish products that people wanted to buy. He said Irish suppliers would always have the opportunity to have their goods on Tesco shelves, but ultimately the customer would decide.
Asked about calls by a food industry body for a supermarket ombudsman and a code of practice in the sector, he said he would support anything which would reduce costs, but the last thing we needed was more red tape.
