S Group has started selling Tesco private labels in its Finnish Prisma, S Market, Alepa and online stores. The Finnish grocery leader’s agreement with the international giant allows it to list around 200 SKUs from the Tesco Finest premium label and the Tesco Free From special interest food line.
Many of the products are already available on the retailer’s Prisma e-commerce site. The range has a clear focus on typical British star categories such as condiments, sauces, jams, tea and biscuits, together with the likes of chocolate, juices and pasta. “As part of our endeavour to match customer expectations, we are now addressing the increasing desire for pampering and luxury in everyday life” said Ilkka Alarotu, SVP, SOK Retail Business.
Up to this point, the focus of the assortment for S Group and its main competitor Kesko has revolved around highlighting their domestic grocery ranges. S Group even has a private label called Kotimaista dedicated solely to Finnish products. Therefore, having a picture of a British butler serving Tesco products from a silver platter on its e-commerce landing page is a clear effort to disrupt the market.
This move indicates that S Group is ready to try something new, differentiate from the competition and gauge shoppers’ response – when it comes to both foreign specialities and premium ranges. The best part is that the retailer can do so without incurring any development costs since the Tesco products come as a ready-made package.
At the same time, S Group also needs to offer a quality free from range, making Tesco’s award winning and successful Free From private label the perfect choice. Given that its fierce rival Kesko is ahead in this sector, it is wise for S Group to look to fill this gap. This is particularly important because we expect demand to pick up as consumer spending is increasing in the country.
So why offer English products rather than arguably more typical cuisines such as Italian or Spanish? We suspect it is a case of choosing the right retailer rather than the country of origin, in this case. Tesco has a well-tested export machinery and as one of the world’s leading retailers can offer very competitive prices, especially given the plummeting English pound following the Brexit decision. Furthermore, the connection between premium and British is likely to be perceived as salient by Finnish shoppers. After all, S Group is clever enough to market it as food fit for English lords or royalty.