Tesco hits out at Ocado price claims

by Jemima Bokaie Marketing 14-Mar-08, 13:21

Tesco is threatening to complain to the Advertising Standards Authority (ASA) about Ocado's latest advertising campaign, which claims that the online retailer can match Tesco's prices on ‘all household brands'.

The supermarket has written to Ocado, part-owned by John Lewis, asking it to stop running ads that claim it can match it on 3, 500 branded products, including Coca-Cola and Pampers, or it will complain to the ASA.

Tesco, the UK's largest supermarket, claims that it is still cheaper on 2,500 products, including Lemsip Cold and Flu sachets and Tetley decaffeinated teabags, according to data supplied by Mysupermarket.com.

The press ad, which ran in national newspapers this week, is part of the Ocado's strategy to attract thousands more customers this year following losses of £300m since the business launched eight years ago. It is also hoping the price-match initiative will change the perception of Ocado as an expensive retailer.

This week Tesco, which claims to be ‘delighted that Ocado sees Tesco.com as the benchmark for low prices', announced the launch of a £170m cost-cutting initiative, which will see more than 5,000 prices fall on products from tomatoes to nappies.

Savings will be made on products across Tesco Value, Standard and Finest ranges as well as branded, non-food and speciality products such as organics.

Tesco commercial director, Richard Brasher, said: ‘In the last decade Tesco has saved a typical UK household almost £5,000 by investing in lower prices and today we pledge to go even further as prices on thousands of everyday products get even lower.'

For the 12 weeks to 27 January, Tesco's sales rose 5.4%, which was lower than Morrisons' 11.3% and Asda's 6.2%, and marginally higher than Sainsbury's 5% over the same period, according to TNS Worldpanel.