CEO Philip Clarke has previously criticised the “unhelpful” level of couponing and money off vouchers in the market.
Janet Smith, Tesco head of group loyalty told The Times: “The use of mass couponing that we’ve seen retailers slugging it out with are pretty blunt. They do drive footfall but they are not as effective as more targeted couponing. We will be pulling back from that.”
Tesco will shift to using more targeted coupons and vouchers to offer customers money off products they already buy, rather than encouraging trial of new products.
It demonstrates a shift away from aggressive promotional activity that has been hitting supermarket margins in the last year.
The supermarket is also using its Clubcard data to shape store ranges and layouts to suit local demographics rather than having ranges decided by the size of the store.
Clarke also signalled that Tesco would put more emphasis on food, rather than clothing or non-food, and is reducing space dedicated to non-food ranges in many stores in a bid to boost performance.
Read Marketing Week’s analysis of alternative promotional models retailers could adopt in a bid to reduce the pressure on margins but satisfied consumer demand for good value.