Tesco has thrown down the gauntlet to games retailers by grey PlayStation package at below retail street price. importing Sony PlayStations to sell cheaper packages through its chain of supermarkets.
The food chain has bought £5 million worth of Sony kit from Germany and other European countries. It will also be importing camcorders, micro hi-fis, and CD players. The consoles will be sold at £99.99 in Tesco, undercutting the £129.99 asked by all other retailers.
The grey import package from Tesco includes a PlayStation, one controller, one demo disk and a lead for connecting it to a Scart socket. The Sony pack on the other hand consists of two controllers, a memory card, a demo disk and an RF lead which connects through the aerial socket of any TV.
Sony is the latest in a long line of brands to be hit by Tesco's price cutting policy.
David Neal, sales director at Sony exclusive distributor CentreSoft, claimed the two packs were not in direct competition. 'Our pack is better value,' he said. 'If you include a second controller and a memory card and an RF lead then our pack is better value.' He added: 'We will always give our customers the tools to compete.'
A representative at HMV was concerned customers would be confused by Tesco's advertising, but insisted that he did not expect it to have a major impact on its own sales.
Michael Kraftman, marketing and technical director at Tempo, said: 'Tesco has made it public that it wants to move into our market. The lower level of the market revolves around commodity products. PlayStation is a high-profile box with no value add. It is inevitable that people will move into this part of the market.'
Sony is following up the PlayStation with a handheld game system to be launched this time next year. It will allow players to load up games from CDs using the existing machine. The company expects to have sold two million PlayStations within the next month.
DIXONS RESPONDS TO TESCO AD
High street giant Dixons Group has hit back strongly at Tesco, claiming the food chain has run a series of misleading advertisements over the Sony PlayStation.
The attack came after Tesco ran advertisements claiming that a Sony PlayStation would sell for £129.99 in Dixons but was available for £99.99 in Tesco.
In a statement, Dixons claimed: 'This was misleading and inaccurate information since the comparisons are not made on a like-for-like basis.' Dixons claimed its package includes additional items totalling £52.97, making its package better value by £23.
Trevor Bish-Jones, marketing director at Dixons, said: 'Tesco's claims are misleading and inaccurate. However, you look at it, the Tesco offer is worse value for money than the Dixons package. Unless customers have a Scart TV, they will require at the very least an RF connector which will cost an additional £19.99.'
He added: 'It is plainly untrue to suggest that customers are not getting a good deal. Dixons offers a price-matching policy that guarantees to match the price of the same package if found locally and brought to the attention of the store within seven days.'
Dixons has complained to Hertfordshire Trading Standards department about the advertisements. The high street retailer claimed it had received an assurance from Tesco that it would not repeat publication of the advertisement.
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