Tesco is to expand its Discounter range into non-food sectors and introduce lower-priced clothing ranges after its attempt to become Britain’s biggest discounter got off to a strong start.
Sales data seen exclusively by Retail Week shows that in the first six weeks since the launch of the discount range of Fresh n Lo semi-skimmed milk, sales have totalled 7 million litres, worth about£3.7 million.
The sales to date show how consumers are increasingly turning to value brands as the recession kicks in. The Discounter range was launched in response to the growing number of customers trading down from Tesco to hard discounters Aldi and Lidl.
Other everyday basic items as well as milk have proved the most popular parts of the range. The company has sold 2.4 million rolls of Spring Force toilet tissue, 178,637 litres of Daisy washing-up liquid and 427,000 boxes of six Farm Pride free-range eggs.
“Essentials such as milk, bread and eggs are really popular, and household basics such as Daisy washing-up liquid are selling well,” said Tesco food marketing director Sidonie Kingsmill.
Tesco is also poised to extend the Discounter range “in the coming weeks” to other product categories, which is likely to include non-food.
The grocer will launch additional clothing lines in the next few weeks in an attempt to maintain market share in the non-food sector. Tesco said that the Discounter brand would not extend to clothing, but that “new price points” would be introduced for new clothing lines. The prices on the Discounter range are above Tesco’s Value products but below branded alternatives.
The sales numbers will provide some respite following concern about how the recession will affect Tesco. Last week Shore Capital analyst Clive Black claimed that management has trimmed its UK life-for-like growth forecast from 3 to 4 per cent to 2 per cent and is adjusting its cost base to adapt to the tougher times.
This week ING analyst Peter Brockwell downgraded Tesco from buy to hold in the light of concerns over the UK consumer environment and the prospects for the economies of some of the overseas markets it operates in.
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