Tesco Plc (TSCO), the U.K.’s biggest grocer, today unveiled a revamp of its higher-priced Finest food range, introducing products such as hand-foraged mushrooms and New Zealand Pinot Noir wine as it seeks to win back shoppers.
The range, first introduced in 1998, has been given new packaging and 400 new products, U.K. chief Chris Bush said today at a conference in London. Tesco is also dropping 200 items, leaving Finest with about 15,000 products including Madagascan dark chocolate bars and Kenya Makomboki tea bags.
Costing “tens of millions” of pounds, the rejig is aimed at further improving Tesco’s own-brand offering as the grocer attempts to revive growth in its domestic market. The retailer rebranded its lower-priced Value range as Everyday Value in April 2012. Upscale rivals such as Waitrose and discounters Aldi Group and Lidl are chipping away at Tesco’s lead as consumers seek a combination of cheaper prices and better food quality.
“This isn’t about us taking on Waitrose,” Bush said. Instead, the range is part of moves aimed at “building a better Tesco” with a greater emphasis on the quality of its food.
Tesco last week reported unchanged U.K. same-store sales in its fiscal second quarter, excluding petrol and value-added taxes. It’s suffering from what it calls a “difficult macro environment” across many markets. The Finest rejig is “another part of our turnaround process” that may be expanded beyond the U.K., Bush said, though “this isn’t going to be a quick fix.”
The revamped Finest range will be backed by television advertising starting Oct. 14 that will aim to demonstrate the provenance of the products, Tesco said. The U.K. supermarket-industry leader has been sponsoring the new series of popular historical television drama “Downton Abbey.”
Tesco said it expects Finest sales to improve at a “double-digit” pace in the run-up to Christmas as customers splash out more on luxury. The grocer declined to comment on whether the new range would boost its profitability.
More than 12 million Finest products are sold every week and the brand is “a significant” part of Tesco’s U.K. sales, which represent about two-thirds of its total revenue.
The range won’t necessarily cost more, Tesco said, with the price of many products remaining the same.
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