The Tesco effect

Tesco's share price has plummeted with the announcement of a fall in like-for-like sales over the festive period compared with last year, wiping almost £4bn off the value of the company. According to Robert Peston, "the company admits it misjudged the desire of its British customers for promotional discount coupons in these straitened times". According to Calton, Tesco also misjudged the effect dropping its sponsorship for Cancer Research's Race for Life would have on its customers, particularly when combined with an announcement that it was supporting Gay Pride in 2012. The Daily Mail had a field day, proving that there IS such a thing as bad publicity, and Calton knows several shoppers who decided to take their custom elsewhere. Tesco has now, belatedly, decided to continue supporting Race for Life but the damage has been done and the 'Tesco effect' is now synonymous with 'PR disaster', in Calton's mind at any rate.