Major Retailer Starts Two Tier Retailing

One of the golden rules of retailing is knowing who your customers are and then addressing their needs. When you have a national or international chain this can be quite challenging as the easiest model to adopt is “one size fits all”. Tesco in the UK are about to change their model to improve sales. They are introducing a two tier model; In less affluent communities they will merchandise the cheaper brands and in more affluent communities they will select more expensive brands. This means that there will be a price variation depending on the location. Most of the supermarkets, including Tesco, have been promoting price drop strategies over recent months. This is now a change of tactic as the price drop did not appeal to all consumer groups. It will be interesting to monitor how this strategy works in the market place and to see if other large retail groups follow this approach.