What’s the problem with Yoo? Why has Tesco’s new line set the cat amongst the pigeons?

So, Tesco is launching its own ‘exclusive’ range of yoghurts and it seems to have got the brand community a bit agitated. There is nothing new about a retailer having an own brand, named product. Tesco already do it in their electrical and fashion sectors, but it is less common in the food category, I will admit. This seems to be what is causing the raised eyebrows. Categories have traditionally carried a selection of brands – a premium brand or two, a mid-range, perhaps an own brand and a value brand too. So what is the strategy here?

There has been a bit of head scratching, but whatever your opinion of Tesco, they don’t often get a lot wrong strategically. They claim it is a 100% British product; a point of differentiation with the French and German brands. Whether that is enough to temp brand loyal customers from their Euro favourites remains to be seen. More importantly, it is to be around 20% cheaper. How the consumer will view the logic of the brand’s positioning against the rest of Tesco’s offering will be interesting to watch.

It is flagged up as ‘exclusive to Tesco’, but not overtly as a Tesco brand. It seems curious that the retail giant which many see as a trusted brand should not put all the power of its name behind the new lines, rather than the substantial effort and expense of launching a new brand (albeit with captive distribution). The last thing a brand needs is obfuscation.

Taken to its logical conclusion, a retailer with scale and power of Tesco could launch new branded products in every category where it identified  gaps.  Other brand owners would find themselves watching not only their competitors, but also their major outlets.

For brand-watchers, another variable has been thrown into the mix with a whole new range of possibilities for strategists.

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