A company spokesperson explained: “We are very flexible and try to follow the market changes at all times; for now this seems to be the most efficient development strategy. It is hard to predict, however, whether we will continue with this strategy in the long term.” The expansion of small stores such as Tesco Express has been targeting town centres and housing estates instead of locations in the outskirts of the towns. Most of these shops were previously operating as supermarkets. Tesco buys or rents them and refurbishes them to meet the identified local needs. Many of these shops are now operating in Budapest but more and more are opening across the country.
Focus on own-label brands The economic downturn created a huge challenge for the whole retail sector, as the company spokesperson says: “We had to satisfy the increased customer demand for cheaper products, therefore the assortment of these products has been greatly increased. At the same time, it was a challenge for us to
balance the price boosting effect of the economic crisis and try to sell products that were not more expensive than a year ago.” The most important product range that was specifically created to respond to the negative effects of the changing market is Tesco’s own-label products. These products have similar qualities to branded products but at the same time they are available at much more favourable prices. The introduction of Tesco Színes in 2007 brought a new element within Tesco’s ownlabel brands. The range was established to create a new brand that suggests higher quality value than Tesco’s oldest brand, Tesco Economy, which guarantees the lowest prices on the market. The brand name, Színes (meaning Colour) was created by the customers themselves. The range is marketed in attractive packaging and offers a wide variety of goods: fresh and dry products, cosmetics and household chemical goods. Products in the Finest category represent premium quality products at lower prices.
In spring 2009 Tesco launched the Light Choices range in Hungary. This range includes nutritious products that have reduced calories and low fat and sugar content and they are particularly popular among people who live a healthy lifestyle. A new category, the Organic range arrived from England in 2008 and appeals to ethical shoppers, as all products in this range are fair trade goods. In recent years Tesco has introduced a new discount product range under the name of Családi Márkák (Family brands), which provides great value for the whole family. Products in this range are only available in Tesco stores and they are specifically marketed to compete with products at special discount stores. Technika, is Tesco’s own brand for electrical goods including LCD and traditional CRT televisions, DVD players, MP3 players and other household equipment. The Cherokee clothing brand was introduced in central Europe including Hungary in 2006 and has been increasingly popular ever since.
