Tesco seeks supplier discounts as it ratchets up pressure on Aldi

Britain’s biggest grocer is extending its Aldi Price Match campaign to almost 500 own-label and branded products as it bids to win back market share.

But that drive has resulted in Tesco demanding “offensive” discounts from some suppliers, according to The Sunday Times. 

The supermarket giant has won customers back from rivals including Aldi and Lidl during the coronavirus crisis – the first time for a decade it has gained market share from the German duo – and it plans to turn up the heat further to maintain that momentum.

After launching its Aldi Price Match campaign on 200 products in March, Tesco has pledged to extend that to hundreds more lines – a move that is expected to spark a fresh price salvo from the discounters.  

It comes after Tesco boss Dave Lewis reiterated his strategy last month to scrap what he called “disruptive” promotions and focus instead on everyday low prices.

He said: “I’ve been having this conversation with suppliers for six years. I don’t see why anybody should pay more for a brand in Tesco than anywhere else, and so our job is to work with them to get to a place where we can be competitive in the marketplace. 

“It’s better for us to focus on large-volume lines that customers really want and invest our money together in the price of that, rather than deploying it across a range of promotions, which are disruptive in the supply chain and ultimately don’t give customers the best value.”

But one supplier said: “What we have been asked for is frankly offensive. If Tesco removes our promotions, they will halve our business [with them].”

A Tesco spokesman added: “We have been speaking to suppliers about how we can work together to continue giving our customers great value. We don’t believe that our customers should pay more for a brand in Tesco than anywhere else. 

“Through the Covid-19 crisis, we have worked collaboratively with suppliers to support their businesses and help our customers get the food they need.

“We are committed to open, fair and transparent partnerships with all of our suppliers, and that collaborative approach will continue as we look for new and innovative ways to bring our customers great value.”