Tesco is rolling out hundreds of new “pound shop” areas to its biggest stores as it takes aim at the likes of Poundland.
The retailer has so far introduced the Brand Outlet concept to more than 60 stores and plans to increase this to nearly 300 in the coming weeks.
It is also launching a point-of-sale marketing blitz to support the rollout. Products will be sold for as little as 50p, with the line-up so far dominated by non-food items including washing up liquid, detergents, kitchen tissues, health & beauty products and petfood.
Tesco pound shop buying manager Paul Bangs said it planned to offer a “vastly improved range” of discount items. “This is a project that Tesco is taking very seriously,” he said in a letter to suppliers. “As a new concept, implementation will be absolutely key to success.”
Bangs also said the retailer would be launching a new PoS package including header boards, hanging banners and other signage to increase footfall in the area.
It is not the first time Tesco has tried to take on the pound shops. In 2009, it rolled out a ‘pound shop’ strategy for both food and non-food, with an aisle dedicated to the lines in largers stores, and in 2012, it rolled out a £1 section to around 50 stores.
One supplier in talks with Tesco regarding the latest, larger scale initiative said the retailer would find it hard to compete with town centre pound stores. “Tesco are chasing their own shadow at the moment and this could just end up with them just creating even more redundant space,” he said.
Steve Dresser of Grocery Insight added: “Tesco had to do something about the likes of Poundland, but I think shoppers would rather find deals through the normal course of their shop than have to go down a couple of separate aisles.”
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