This morning, whilst checking the current stock positions, it shows Tesco down 4.25 (196.25 after yesterdays announcement. This is all the more crippling when Tesco was on a good run on the trading floor with last months growth making it 'one to watch' for sure. Last Wednesday, the 5th October, they saw their highest stock price of the year - 207.10
So, basically Unilever turned round to Tesco and was like, "Hey, Brexit, falling pound, increasing uncertainty, we kind of need to raise our prices". Tesco "GTFO".
In the simplest of layman terms.
What does this mean?
On the surface this is very smart and shrewd move by Unilever to protect their brands. They are looking longterm picture which is refreshing to see and aren't concerned to jeopardise distribution to do so. It also shows the biggest sign: Retailers are at the peril of brands. Are Unilever effectively saying 'You know what we've put up with this shit for so long and now fuck it. We create the products, we market the products and really you are just a building with shelves. Fuck you.' Let's not forget that Unilever posted profits of £2bn last year - so we can safely assume they have a few quid to ride this one out.
The tides are turning and it will be fascinating to watch as other brands may follow suit on this stance.
What does it mean for Tesco?
They are being made out to be the bad guys. But, what that doesn't make sense. They don't want to raise costs because that means the consumer has to spend more. So, that's a good thing. No? However, this is Tesco's brand. You go there knowing you'll spend less on brands than in the competitive supermarkets. It's then also kind of common knowledge that the average consumer will then purchase the rest of their goods from the store - because they are already there and The Walking Dead has started again (Time is zombies). Do Tesco accept Unilever's higher prices or just isolate themselves and cut ties all together? There are a fuck lot of Unilever products.
Could be a major shift. I like that.
I hate Marmite.