Tesco, Company Formation and Christmas Spending

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Many business analysts have suggested that the rise of the ‘power brand’ – shops such as Tesco, which sell everything from books and DVD players to milk and newspapers – would result in the end of the high street and independent entrepreneurs considering company formation in the retail sector. And as Tesco announce that 2009 was the best Christmas they have recorded in three years, while many independent retailers waited for the Christmas uplift in sales which never came, you could be forgiven for agreeing with them.

The retail giant has always been an early adopter in the market; it was the first to offer a loyalty scheme, the first to offer online shopping, the first to truly commit to diversifying its product range  and more importantly, the first to truly embrace discounting.

In the current economic context, it is more important than ever to offer your consumers, what they perceive to be a ‘good deal’. Tesco’s entire pre-Christmas marketing strategy was focused on the strap line ‘Every little helps’ and from extra club card points to aggressive price cutting, Tesco devised and extremely compelling campaign which, as these new figures testify, eventually paid off.

What this means for the independent retailer? Only time will tell.

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