Tesco price cuts – is it all good?

Diarmuid MacShane

May, 2009

Diarmuid MacShane

Tesco Price Cuts

We’ll all have been delighted to hear this week that Tesco have dropped their prices in stores close to the border. In 11 of these stores, prices will have dropped by 22% on average – permanently according to Tesco themselves.

It’s just a pity that Tesco haven’t done the same across all their Irish stores.

But then again, most of the Irish Tesco stores weren’t losing business to Asda and Sainsburys in Newry and other Northern Irish towns.

So, when you hear Tesco telling us that they’re dropping their prices in the interests of the Irish consumer, you should really know that it’s because those 11 stores were losing huge amounts of business – and as I’ve always said should happen, when business start losing money, they’ll either drop their prices to attract customers back, or else they’ll close down.

Many stores have closed down recently, so it’s good to see Tesco trying something else.

My only concern now is that we’re unlikely to see these price cuts implemented across the country – unless we consumers use our buying power to let them know we’re not happy with the prices their charging everywhere, and not just close to the border.

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One Response to Tesco price cuts – is it all good?

  1. Alex Cleland July 31, 2009 at 23:34 #

    Diarmuid I am sure you may be happy with the new Tesco pricing policy but I can confirm this policy from Tesco will eventually cost each and every one of us living in Ireland. I will explain: Tesco are now buying almost all of the goods they sell from the UK. The knock on effect is Irish companies and distributors do not have the advantage of a low cost base as is the case in the UK. This will encourage them to lay off staff to reduce prices to maintain a level of business. Smaller Irish based companies will then have to source goods from outside our borders to be able to compete thus reducing more jobs with Irish supplier. The increased numbers in unemployment benfits being claimed will force the government to increase taxes and other costs.
    Now the country is in a position where Tesco is the main player in the market with a controlling interest. Many of the smaller companies have ceased trading as the consumer has believed all the hype surrounding Tesco’s price cuts and despite having the better value for the consumer were unable to convince the consumer their prices were better.
    The local communities are now struggling to find funds for teams, charities and local events as the local retailers are either no longer in business or struggling so badly they cannot afford the sponsorship. These funds which were provided by the local businesses will never be provided by the larger multiples such as Tesco and Dunnes as they do not provide such a service to the community. The local community does not have the funds available as a large ammount of the locals are now unemployed due to the closures of the many Irish based businesses.
    This is what could happen if companies like Tesco are allowed to control what products we buy and where we buy them.
    The question’s are quite simple. Do we as a country want to depend on British companies to feed our children? Do we want to pay higher taxes? Do we really want to provide the British government with revenue which should be spent in Ireland?

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