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Tesco and Heinz reach peace deal over prices

Tesco and Heinz reached an amended supply agreement after a sharp price dispute led to some of the ketchup maker’s products temporarily disappearing from supermarket shelves.

In a joint statement, the two companies said they were “delighted to have reached an agreement that will see the full range of Heinz The products are returning to Tesco shelves. ”

“It’s great to be back together,” he concluded. Details of the amended agreement were not disclosed. Said retail experts Tesco He probably agreed to pay a higher price than in the previous supply agreement but less than what Heinz agreed with his main rivals.

The supermarket declined to say whether retail prices would rise as a result.

Tesco is still complicated individually Dealing with Mars PetcareThe US-owned manufacturer of Whiskas cat food and dog pedigrees.

In both cases, the supermarket chain said it was unwilling to pass on what it called “unjustified” price increases to its customers. Both suppliers routinely achieve operating profit margins significantly higher than the 5% typical of supermarkets.

Some observers described that of Tesco Assertive position As a public relations stunt designed to create the image of the grocery store owner as a consumer champion, while rivals teased the UK market leader in social media over the gaps on its shelves.

A tweet from J Sainsbury on Friday highlighted the promotional pricing of Heinz tomato ketchup with the words “Is the ketchup over? Not in Sainsbury’s. We went straight for the sauce to help you make your barbecues.”

But it is also an indication of how large supermarkets are determined not to repeat the strategic mistakes of the global financial crisis.

So, an attempt to maintain a profit margin at the expense of price competitiveness has led customers to turn en masse to restaurants. Aldi and Lidel have opened hundreds of new stores and their market share has grown from 5% in 2010 to more than 15% now.

Both Tesco and Sainsbury’s have since pledged to match Aldi with hundreds of core product lines, eroding the notion that muslin is significantly cheaper.

Both also warned investors that profit growth will halt this year due to the need to absorb price increases to maintain buyer loyalty and market share.

Retail analysts believe there may be more public objections as annual supply contracts are renegotiated amid rising energy, labor and raw material prices.

Tesco and Heinz reach peace deal over prices Source link Tesco and Heinz reach peace deal over prices

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