Ever wondered why Tesco profits surge?

Group profit……Up 27.3% on Revenue of £28.3 Billion.

This return to profitability, only three years after the accounting scandal which cost it Billions to put right, is truly amazing.

However, if you take one single item, showing how Tesco actually manipulates their marketing so that they appear to be staying the same, on prices of course; but in reality, there is a vast difference.

tescoorangeThe photo shown speaks volumes about volume, as it were. Note the Tesco squeezed orange juice pack, holding a standard 1,75 litres of orange juice. It is sold at £1.99, which is fair value for a guaranteed freshly squeezed juice carton. Beside it stands a Tropicana pack of juice, marketed and sold as the standard 1.6 litre carton of fresh juice, normally sold at £3.50.

But the clever thing is that the Tropicana pack used to be sized at 1.75 litres, the same as the Tesco pack, and it was sold at £3.50 per pack.

So the Tropicana juice, which was 1.75 litres, is now sold as 1.6 litres, but for the same price as the former 1.75 litres pack. So just cast your minds over the quantity of premium Tropicana juice packs, and you may form just an estimate of, say 2,000,000 packs for the year. Then work out the actual saving from selling all that juice in a smaller container at the same price; which by my old style maths works out at £296,000.00.

Do that again for loads of items which everybody shops for, and you get 27.3% rise in profits.

Fair enough, no-one forces the shopper to buy the premium brand, but is is the market leader.