TESCO

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Tesco promotes its Healthy Living range of products and website to consumers who want to lead healthier lives. A report by the Food Commission revealed that some of the foods in Tesco's Healthy Living range may need to be relabelled because of the amount of salt, sugar and fat they contain. This is especially interesting considering the 'traffic lights' labelling system that Tesco is trialling to highlight nutritional levels in products. Tesco announced its decision in the light of increasing concerns about poor diet and the obesity crisis, and presumably to pre-empt any legislative action on food retailers to provide this information along guidelines set by the Food Standards Agency (FSA). One of consumers' greatest worries is that they often simply do not know which products are genuinely healthy choices.

The trial uses different colours on the front of packs to highlight the levels of fat, saturated fat, salt and sugar in products. Research by the Food Commission suggests some products in Tesco's Healthy Living range will have to carry either 'amber' or 'red' lights. The commission, which promotes healthy eating, compared products with nutritional guidelines issued by the FSA. Tesco said it was using a different set of criteria based on dietary targets set by the Committee on Medical Aspects of Food and Nutrition Policy and the World Health Organisation. The FSA guidelines would mean that Tesco’s Healthy Living Sultana Bran Flakes would carry two red lights because they are high in salt and sugar. Equally, Sunflower Spread would display red lights for fat, saturated fat and salt.

A Which? Report from 2003 reinforces this. It claimed, for example, that Tesco 'healthy' custard creams contain less fat than the standard options but they contain more sugar and more salt, hardly a healthy choice. And Tesco’s 'Healthy Living' apple juice only contained 67% apple juice, the rest is made up with water and sweeteners. As Which? points out 'this reduces the sugar level, but it means that you are getting less apple juice than in the standard product. Is this really better for you?'

In general we eat too much of the wrong types of food, and supermarkets such as Tesco, despite their labelling trials and Healthy Living schemes, have been, and still are, selling ready meals and other products full of fat, sugar and salt. Indeed, Tesco is opening a Krispy Kreme doughnut concession at its Watford Extra hypermarket in October 2004. The Consumers’ Association report 'Recipe for Disaster', May 2004, is a sobering reminder of the dangerous products on our supermarket shelves.

Tesco does encourage consumers to eat five portions a day of fresh fruit and vegetables in its stores and on the ‘Healthy Living’ website, but such produce, if not organic, may also contain an unhealthy dose of pesticides. More and more fruit and vegetables are being grown in intensive hydroponic systems (i.e. in water rather than soil), this is certainly the case in the UK with tomatoes and cucumbers. Supermarkets prefer this highly-controlled factory-farm method as they are more likely to get cosmetically perfect produce. Researchers believe that further research into the nutritional levels of hydroponic produce is essential as it may lack nutritional value.

Tesco may be the leader of many a supermarket price war, but this is not the same as offering healthy food at an affordable price. Although Tesco and the other supermarkets sell some products cheaply, such as bread and milk, these are known as loss leaders and are used to entice customers into the store. Fresh fruit and vegetables are consistently shown to be more expensive in supermarkets than on market stalls and in greengrocers. Tesco Express convenience stores, which are springing up around the country as One Stop and Nite and Day are rebranded, and Tesco Metro stores are aimed at the lucrative 'cash-rich time-poor' shopping market. This excludes many local people who simply can't afford to do their whole weekly shop in Tesco.

In 1995 Tesco became the first supermarket to introduce a company loyalty card, an idea developed by the then Deputy Managing Director, Terry Leahy. At first other supermarkets were sceptical, but the concept caught the public imagination, leaving others racing to catch up. Loyalty cards are now big business, with a 2002 MORI poll indicating that more than half of UK adults use loyalty cards. For a few pence off items we probably don't even want, we willingly hand over our addresses and other detailed personal information. This information is not only useful to the supermarket, but can be sold on as a valuable commodity to other marketeers.

Being able to monitor our purchases allows the supermarkets to tailor-make their marketing strategy to the individual. Tesco essentially splits its customers into 27 different categories depending on how, when and why they spend their money. Once categorised, customers can be targetted for products that people in their category are likely to want to buy, e.g. if you buy asparagus, its likely that you would also be interested in buying parmesan. Some may consider this targeted marketing helpful, but remember this is only insofar as it is profitable. And it is.

Research by management consultants McKinsey shows that far from saving money from loyalty cards, 48% of people who join such schemes actually increase the amount they spend at supermarkets. At a Health Select Committee Meeting meeting on obesity, it was suggested that Tesco Clubcards could be used to promote healthier alternatives to those customers who purchase a lot of high-fat or sugary foods. Tesco executive, David North, rejected this idea as patronising and draconian. Supermarkets, after all, do not have a moral duty to make sure their customers eat more healthily.

There are also civil liberties issues around who can access loyalty card data, which in our increasingly paranoid and authoritarian state, could in the future, be turned over to the government to keep a closer eye on us and our behaviour. Considering the huge range of products available from supermarkets, they can tell an awful lot about us from our shopping habits. The Institute of Grocery Retailing (IGD) recently found that 40% of shoppers were getting fed up with loyalty cards, in part precisely because of the intrusion and data-protection concerns.

The research found that only 8% of shoppers would change stores to take advantage of a loyalty card, while 58% would move for lower prices. It also found that more than £400 million of rewards go unclaimed each year. Meanwhile 10 million people are still 'actively using' the Tesco Clubcard, and there are now over 5,000 venues where customers can earn Clubcard points including opticians Dolland and Aitchison, Marriott hotels and Powergen. Until it was replaced with a free in-store magazine, Clubcard magazine had the highest circulation of any lifestyle magazine in Europe, and was sent to more than 8.5 million people.