In a move that has the potential to seriously disrupt the status quo of the appliance industry, Tesco have announced that they are set to introduce cut price appliance warranties on goods sold by the supermarket chain offering discounts of up to 58%.
The Grocer reports that Tesco are to offer a three-year warranty on a washing machine at £59.99, compared with £129 at Currys, and a five-year warranty on a Samsung TV at £99, compared with £159.99 at Comet. That is a considerable amount less and liable to prove far more attractive to consumers than offerings from rivals however, worse, it makes rivals look very bad indeed.
The Grocer goes on to report that the warranties will be available in 358 stores by Christmas, are being offered in partnership with SquareTrade.
“We are always looking to give our customers value for money, and that’s true of our protection policies as well as our products,” said Tesco commercial manager for aftersales and services Karen Brindle. “We chose SquareTrade because of its focus on giving customers hassle-free service at a great price.”
CEO Philip Clarke admitted at Tesco’s half-year results earlier this month that Tesco Direct was yet to make a profit, despite the launch of Tesco Marketplace in April, which enables third party manufacturers to offer products for sale via Tesco’s website.
It would appear that Tesco are looking to kick start their non-food offerings by tempting people with what may seem to some as irresistible deals.
However, as we said, this will make offers from other retailers look incredibly bad value as well as offers from other warranty specialists who can charge considerably more than the figures indicated for an annual policy.