Tesco Poland finds success with discount brands

In an interview with The Times, Tesco Poland’s CEO Ryszard Tomaszewski said that retailer’s “Discounter” lines have been a success since their introduction last month. “We think we have a good story. The Polish market is very competitive. There are more than 2,000 discounter stores and I noticed, two to three years ago, that they were taking sales from me. So I had to sit down and think about what their strengths were and how we tackle them,” said Tomaszewski. “They have three strengths - simple ranges, of around 1,000 products, with a simple supply chain. Secondly, they were very good on price perception. Thirdly, they strongly developed their own branded products, with very good quality and pricing.” In order to respond to the strong discount threat in Poland, Tomaszewski said that Tesco lowered prices of private label items by 15-20% in some areas. “My target was that my prices, versus theirs, must be 10% lower on half of their bestselling lines. It cost a lot of money but, in my 250 stores, we achieved a 30-40% increase in turnover. In three or four months, I took [the discounters’] big weapon and turned a disadvantage into an advantage.” Forty brands from the Discounter range, which was introduced in the UK last autumn, were launched in Poland at the beginning of March. Tomaszewski said: “In Lidl, for example, they have 950 products which they stock - Nescafé, Pepsi, Coca-Cola - and I said: ‘OK, I will match their prices, not only in small stores but in all stores.’ I knew this would cost me money but in doing so we were sending a message to customers - that there was no reason to go to discounters.” Tomaszewski added that another advantage for Tesco was being able to cater to the large number of Polish shoppers coming home after living and working in the UK, where Tesco is well known. “In the UK, Tesco has the highest market share, while here, I am only 6% of the market and my nearest competitor, Biedronka, has 13%. So when Poles come back from the UK, more of them know about Tesco, which is an advantage.”

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