“COMMERCIALLY SENSITIVE” is a favourite phrase of Tesco executives. When the company is asked for details of its profit margins in the Republic it says it can’t share them because they are commercially sensitive.
When basic information about its relationship with suppliers is sought it can't be provided, for the same reason, and when The Irish Timeslooked for specific details of price increases Tesco claimed were imposed upon it by its suppliers, a spokesman could not oblige because it was "commercially sensitive".
When the retail giant announced last weekend it was embarking on a €35 million campaign offering consumers price cuts of an average 12 per cent on 1,000 products few people in the industry were surprised. And few were impressed.
The move was widely anticipated because it coincided with the end of the company’s financial year and because its UK parent launched an almost identical promotional push at the beginning of March.
When the campaign was unveiled, price checkers from its rivals swamped Tesco outlets to check and recheck prices. They found many products have fallen in price – and quite a few have fallen by more than 12 per cent – but they also noted that other products had only fallen after first being increased early this year.
When this newspaper revealed yesterday that the prices of many household brands which feature in the price drive had increased in January, Tesco said we were missing the point.
To prove its point Tesco provided The Irish Timeswith two separate price lists featuring products in its new campaign. One contained 250 items which it admitted had gone up in price in the early part of the year before falling back this week. The second list contained 1,000 products which it claimed had fallen without going up first.
Tesco’s marketing director Kenny Jacobs batted away criticism of the 250 price increases and denied that the price yo-yoing was an attempt to mislead consumers. He also dismissed suggestions it was to bolster figures ahead of the end the financial year.
He said the increases could be explained by volatility on international commodities markets and pointed to spikes in the cost of fuel oil, cooking oil, wheat and sugar. He said the spikes had seen suppliers demanding price increases which it had to pass on to consumers.
The idea that Tesco would acquiesce its supplier demands for price increases is hard to believe. It strikes fear into the heart of all its suppliers and always calls the shots. No suppliers will talk on the record about their dealings with the store because they fear the fatal consequences of falling out of favour with the company.
While Mr Jacobs was quick to dismiss the importance of those products that went up and then down, he described the second list of 1,000 products as the central plank of the promotion.
In a long conversation with this newspaper, he repeatedly pointed to the list and stressed that nothing on it had budged in price since the beginning of the year. An examination of the list, however, revealed that some products on it had indeed gone up before coming down, including Flahavan’s Progress Oatlets, Harvey’s Bristol Cream, Coors Beer and Bon Maman Conserves.
There may have been more but Mr Jacobs declined to let us keep the list, claiming it was “commercially sensitive”.
