LONDON (Reuters) - Supermarket group Tesco (LON:TSCO) said on Friday it would reduce the number of branded items in key product areas in its convenience stores as cash-strapped Britons increasingly want cheaper own-brand alternatives.
Britons are seeking savings as they grapple with a cost-of-living crisis stretching into its second year.
UK consumers still faced grocery inflation in July of 14.9%, according to industry data, and have had to deal with 14 consecutive interest rate rises since December 2021.
Tesco, the UK's largest food retailer, said the overhaul in its more than 2,000 Express convenience stores will see over 50 key everyday products replaced with cheaper items, many of them own-brand, with some items less than a third of the price of the products they replace.
"The move comes in response to the supermarket’s internal shopping data, which shows that price-conscious customers are increasingly turning to own-brand products," Tesco said.
Sales of own-label products at British supermarkets have grown at double the speed of branded goods in 2023, data from market researchers NIQ published in May said.
Among the own-brand lines being introduced are Tesco penne pasta at 85 pence ($1.08) and Tesco smooth peanut butter at 1.85 pound, both of which will cost half the price of the previous branded product stocked.
Similarly, bags of Tesco frozen garden peas at 1.65 pound will be almost 40% cheaper than the branded product they replace.
Tesco said the new products will be delivered to stores in the next two weeks, with the change-over complete by the end of August.
In June, Tesco said Britain's food inflation had peaked.
($1 = 0.7865 pounds)