Tesco (LON:TSCO) is scrapping its Brand Guarantee scheme which offered customers a price match on branded goods, the blue-chip grocer has said. The move comes with Britain’s biggest supermarket arguing that the scheme is ‘far less relevant’ now than when it was first introduced in 2015.
Tesco’s share price has fallen into negative territory in today’s session, having given up 0.27 percent to 261.00p as of 14:35 BST. The stock, however, is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 1.60 percent in the red at 7,559.26 points. The group’s shares have added more than 56 percent to their value over the past year, as compared with a near two-percent gain in the Footsie.
Tesco ditches Brand Guarantee scheme
Tesco announced in a statement today that it will end its Brand Guarantee scheme on July 16. The scheme offered customers a price match on branded goods when they bought 10 or more items, including at least one eligible branded product, in larger stores or online, with the difference refunded at the checkout.
“Since Brand Guarantee launched in 2015, we have continued to invest in simpler, lower everyday prices. As a result, the scheme is far less relevant for our customers today,” Alessandra Bellini, the supermarket’s Chief Customer Officer, commented in the statement, adding that the grocer had trimmed the prices of over 260 products in recent weeks.
Analysts on blue-chip supermarket
The 16 analysts offering 12-month price targets for Tesco for the Financial Times have a median target of 275.00p on the shares, with a high estimate of 300.00p and a low estimate of 200.00p. As of June 22, the consensus forecast amongst 22 polled investment analysts covering the blue-chip grocer has it that the company will outperform the market.