Tesco using another name to sell non-food goods on Amazon

Tesco is being forced to bow to the power of Amazon and undercut its own website prices in order to compete in the online marketplace.

Under a new policy of disclosure by Amazon, the supermarket giant has been revealed as the ultimate seller of a range of goods – including DVDs and computer games – marketed on Amazon under the trading name of Oakwood Distribution Ltd. Oakwood is a subsidiary of Tesco.

An investigation by Financial Mail found that the price of numerous items, including a box set of the first BBC series of Downton Abbey and a Super Mario computer game, were far cheaper when sold by Oakwood Distribution on Amazon than through the Tesco website.

For example, Downton Abbey is retailing at £7.43 plus £1.26 delivery, a total of £8.69, on Amazon, but £9.97 on Tesco’s site. The Super Mario 3D Nintendo game costs £29.12 via Oakwood on Amazon and £34.97 from Tesco online.

Tesco has regularly been criticised for squeezing suppliers to push the prices on its shelves to rock bottom levels.

Now it seems Amazon’s demands that retailers do not sell more cheaply anywhere, not even on their own sites, may be turning the tables on the supermarket.

Consumers who believe they are supporting independent businesses may not be pleased to find out they are shopping with Tesco.

Critics have accused Tesco of using a different company name to masquerade as a small business on Amazon, claiming this allows it to slip under the radar of consumers who actively choose not to buy from Tesco.

A spokesman for pressure group Tescopoly said: ‘Tesco has already demonstrated a similar method of operating on the High Street through the One Stop chain of convenience stores. This would appear to be another example of Tesco trying to sell more to consumers who think they are getting an independent choice.’

Tesco said: ‘It is public knowledge that Oakwood is part of Tesco. Where we have excess stock it is sold competitively through third-party marketplaces. Many customers prefer to shop direct with Tesco for additional benefits.’

Consumers can check the identity of sellers through Amazon by using the site’s new Detailed Seller Information button.

Last week, Amazon reported a savage fall in profits from $416 million (£263 million) to $177 million for the fourth quarter of 2011. The figure was $800 million below analysts’ expectations, prompting a nine per cent fall in the share price.

Source : Helen Loveless – Thisismoney.co.uk
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