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BrandIndex data showed the decline of Tesco in December 2011

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Tue, 17/01/2012 - 09:25
YouGov’s BrandIndex data showed the decline of Tesco in December 2011

Back in December 2011, Stephan Shakespeare, CEO and Co-Founder of YouGov, wrote an article in which he made observations using BrandIndex data on Tesco. If last week’s results announcement is anything to go by, these observations appear to have come true. The extent of Tesco’s drop in sales may have surprised analysts but YouGov’s BrandIndex predicted it a month ago.

The article published in City AM, tracked Tesco and its competitors over the course of 2011. Tesco’s BrandIndex scores indicated worrying signs for the brand to which Shakespeare concluded by asking the question: “Could the sheen have come off the company that has dominated the UK grocery market over the past decade?”.

Tesco’s Index score suffered a steep decline over the course of 2011, with scores dropping from +32 (January 2011) to +22 (December 2011), placing Tesco below Morrisons (+28) in the sector rankings and just above Asda (+21). In comparison, Sainsburys managed to only drop from +45 to +40, maintaining the top spot.
Similarly whilst looking at Value scores, Shakespeare noted that it was Tesco’s declining scores in 2011 that indicated a more serious story for the supermarket.

Tesco’s Value scores plummeted from a healthy +37 to +26 (joint last with Sainsburys). However, as Shakespeare pointed out, Sainsburys can fall back on its healthy scores for quality-focused measures whereas Tesco’s cannot. The supermarket’s drop in Value scores, which leaves Tesco below Morrisons and Asda in the rankings, indicates a future of uncertainty and presents a problem for a brand that prides itself on great value as well as quality.

2011 has been a difficult year for the supermarket - resignations and troubles with the ASA and Office of Fair Trading may have, in part, contributed to UK consumer’s growing negative sentiment towards the brand – as evident by Buzz scores for the brand in 2011. In December, BrandIndex saw Tesco’s Buzz scores fall below zero for the first time ever. Tesco clearly failed to win the supermarket battle over the Christmas period - Value scores over the festive period dropped dramatically. And there are further worrying tell-tale signs, notably the continuing decline in sales figures and a campaign (‘Big Price Drop’) which by some accounts has failed to resonate with consumers, all of which indicate that Tesco’s waning scores may not be just a case of bad press but an indication that the value perception that has sustained them for so long can no longer be taken for granted.

Every day, 2000 BrandIndex respondents rate brands either positively or negatively across 7 measures to provide a unique set of measures (Quality, Value, Reputation, Impression, Advocacy, Satisfaction and Buzz) on brand perception. For each one, the proportion giving a negative answer is taken away from positive to give a single score that can range from -100 to +100. All but Buzz (a measure of how positive or negative the “noise” around a brand is) are combined to form an Index score – a comprehensive measure representing a brand’s health.

Index Scores
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Value Scores
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