Tesco fuels petrol war with brand deal

Tesco is hoping to boost grocery sales with a petrol promotion that offers customers up to 50p off a litre, in a move that ties discounts on fuel with purchases of specific brands such as Heinz and Nescafe.

Tesco 50p petrol promo

Customers will receive 10p off per litre for buying each product from a list of branded goods including Robinson’s Double Concentrate, Nescafe Original, Andrex toilet tissue, Fairy Non-Bio washing powder and a range of Heinz products.

The separate 10p discounts can be combined to give shoppers up to 50p off per litre.

Tesco claims the “unbeatable” promotion gives its customers petrol at prices not seen since 2008, when pump prices began rising sharply.

Common supermarket petrol deals, such as Morrisons’ current Fuel Britannia promotion, offer a 6p per litre saving when customers spend over £40 in store. With Tesco’s, offer customers could spend as little as £7 to receive a 10p per litre discount.

The supermarket, which appointed Wieden + Kennedy to handle its advertising account last week, will be hoping that the deal draws shoppers into its stores and and on to its websiste.

Clive Black, analyst at Shore Capital, says the move shows that “there is some life and initiative” at Tesco UK following its period of underperformance.

He says: “We do have to congratulate Tesco for packing a punch into its marketing; 50p/litre certainly catches the eye and may gain some customer traction … the relatively high ticket price to gain access to the fuel discount at Tesco may be a little off-putting to many households. However, if Tesco can sell this promotion well, it may lead to additional footfall and so register on the market share dials.”

The range of branded goods offered are the kind that customers can stock up on to take advantage of the promotion without the risk of perishable products going off – a common criticism of supermarket multibuy promotions.

However, Black warns that it may encourage consumers to bring purchases forward meaning a “fallow” period of lower sales on these items in coming weeks which could hit supermarkets and suppliers.

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