Tesco splits pricing strategy for clothes and food

by Jemima Bokaie, Marketing 01-Jul-08, 10:01

LONDON - Tesco is bolstering its clothing offering with the launch of premium and fairtrade ranges, as it simultaneously continues to slash food prices.

This week, Tesco has cut the prices of 3000 food items by up to 50%, but the supermarket, whose clothing brands include F + F and Cherokee, plans to introduce a range of premium clothing products. It is also rolling out a collection of fairtrade and organic garments in an attempt to become the UK's biggest retailer of fairtrade cotton behind M&S.

As part of the rethink, Tesco, which has traditionally priced its clothing aggressively, is scrapping its five school shirts for £5 offer, increasing the price to £12. It is also considering the launch of a separate childrenswear brand.

Asda, meanwhile, is repositioning George to take on Next and M&S as part of plans to shed its image as a fast-fashion label.

Last year, Tesco became the first UK grocer to sell clothing online via Tesco Direct. Asda will launch George online this year, while Sainsbury's is examining the possibility of adding its Tu range to its website.

Tesco's clothing brands reportedly achieved sales of about £1bn for the year to February.

Tesco was unavailable for comment.