Independent chain Proudfoot has made fresh allegations of predatory pricing by Tesco at its Withernsea store.
Joint MD Ian Proudfoot first reported Tesco to the OFT after the Withernsea store offered £8 off £20 of shopping in a four-week promotion (The Grocer, January 24, p6).
He said Tesco had now made permanent price cuts on key lines at the same store so it could poach his customers.
Proudfoot director Matthew Wood claimed lines such as milk, sugar and Coca-Cola were being sold at permanently cut prices at Withernsea while at three nearby Tescos prices were much higher. For example, he said, two pints of milk were 38p at Withernsea but 68p at the other three stores.
Proudfoot claimed the four-week Tesco coupon campaign had cost his company £100,000 in lost sales. He said sales had been down 20% since the Tesco opened last summer, but during the promotion they were down by 37% a week, despite the fact that for the last two weeks of the campaign Proudfoot redeemed the Tesco coupons in its stores.
Tesco said: “We don’t believe our promotion was an attempt to drive anyone out of business. We don’t do local pricing.”
The OFT is investigating whether there has been a breach of chapter two of the Competition Act, which covers predatory pricing.