In what is hopefully just a temporary measure, Tesco has cleared its shelves of Heinz staples, citing a refusal to hike prices for its customers amid nationwide belt-tightening and many families struggling to make ends meet.
It was little more than two years ago when empty shelves became a reality for many for the first time in generations, when Covid meant the food and drink sector was under extraordinary pressure to keep the wheels turning and the nation fed. Now, while we’re still coping with the aftermath of Covid, we’re faced with increasing supply issues triggered by government red tape, global agriculture and commodity price pressures, and logistic and production nightmares.
I wrote recently about these tricky times for brands in the food and drink industry, and also called-out Morrison’s move directly comparing prices of their own branded products with Heinz Heinz-jacking their own POS in fact. But this is a major statement by Tesco, who aren’t strangers to using their weight to push down brand prices with threats of delists or unfavourable terms.
We’re used to paying a premium for a brand we love, justified by reliable production, quality ingredients and innovative products smartly packaged, but price increases need to be – and feel – reasonable and fair if we’re going to agree to dig deeper into our swiftly emptying pockets, riffing off Tesco’s own point of view, while every little helps, every little (penny) adds up.
It is clear we are seeing a dramatic change in consumer behaviour with the current climate, a recent Kantar Community Report shows that 55% of consumers who purchase sustainable branded grocery products have already or intend to switch to non-eco-friendly brands due to the cost of living today. No doubt, we will continue to see consumers switching to cheaper alternatives to make their wallet go further.
When supermarkets’ own brand products are just as good – or as close as dammit – loyalty is taken to a new level: who demands or deserves more, the brand or the retailer? It will be interesting to see how many switch to the cans and bottles they can actually get their hands on during their weekly shop at Tesco and whether they stick with them longer term, or quickly revert when the shelves are heaving again. Because let’s face it, there is no substitute for Heinz Salad Cream.
I’m sure Heinz and Tesco will quickly resolve their issues and find a way to continue offering shoppers one of the nation’s favourite brands. While I’m a resolute brand fan (building brands is at the heart of what I do every day), and will always support brand owners asking for a fair price for their goods, I admit to tipping my hat to Tesco for standing up for their shoppers, whether that’s through genuine altruism, or a more cynical move to use their weight to remind all who’s boss.