How The Reject Shop’s deal with British supermarket giant Tesco will mean huge savings for Aussies

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Australian discount chain The Reject Shop has started stocking grocery items after securing a deal with the UK’s largest supermarket Tesco – and it means huge savings for shoppers.

Stores across the country will now have designated grocery aisles, selling Tesco-branded pantry items including tea, biscuits, soup, rice, pasta and baby care. 

With 300 new grocery products being delivered in bulk, Chief Operations Officer Dani Aquilina says huge savings are here to stay.

‘What we do specifically that’s different is we make sure we find the best-selling products, we buy them in big volumes so we can get the best prices and then we pass those savings on to our customers,’ Ms Aquilina told A Current Affair.

Australian discount chain The Reject Shop will start stocking grocery items this week after securing a deal with the UK's largest supermarket Tesco

Australian discount chain The Reject Shop will start stocking grocery items this week after securing a deal with the UK’s largest supermarket Tesco

With 300 new grocery products being delivered in large volumes, Chief Operations Officer Dani Aquilina says the huge savings are here to stay for customers

With 300 new grocery products being delivered in large volumes, Chief Operations Officer Dani Aquilina says the huge savings are here to stay for customers

‘It’s everything from pantry staples – oil, vinegar, we’ve got things like rice pouches, snacks and treats – then we’ve also brought in a great baby range, so everything from formula to baby wipes and nappies.’ 

The discount chain, which first launched four decades ago, is eyeing off the likes of Aldi and Kmart and already employs over 5,300 workers across Australia, generating more than $800million in sales each year. 

The products are currently available at all stores in New South Wales, Canberra and Queensland, while Victoria will have the range at the end of the week.

South Australia, Tasmania and Western Australia will all have the new grocery items by the end of September. 

Because of Tesco’s buying power, The Reject Shop has assured customers it will always be fully stocked with cheap items.

For example, Tesco’s Gold Instant Coffee costs just $6 compared to Nescafe at Coles or Woolies for $9.

Tesco’s microwave rice is $1.90 compared to $2.50 at Woolworths and an 88-pack of baby wipes is the same at both The Reject Shop and Coles, but the latter gives a smaller packet.

Tick Yes Marketing expert Peter Applebaum said customers should be excited. 

The products are currently available at all stores in New South Wales, Canberra and Queensland, meanwhile Victoria will have the range at the end of the week

The products are currently available at all stores in New South Wales, Canberra and Queensland, meanwhile Victoria will have the range at the end of the week 

Mum-of-two Carla Filipovski claims she will no longer have to go to any stores other than The Reject Shop for all her needs

Mum-of-two Carla Filipovski claims she will no longer have to go to any stores other than The Reject Shop for all her needs

‘At the moment the Reject Shop in the Australian retail market is like a tinny up against a range of battleships,’ Mr Applebaum said. 

Mr Applebaum said The Reject Shop’s move was ‘smart’ and that it is being ‘nimble’ by increasing market share.

‘We consumers are aching for people to give us a reason why we should buy from them now,’ he said.

‘In the absence of that we will go for the cheapest option so if you have great prices… I’m probably more likely to shop with you than I am with someone else.’  

Mum-of-two Carla Filipovski claims she will no longer have to go to any stores other than The Reject Shop for all her needs.

‘It’s price point that drives me in and they always have things you can’t find elsewhere,’ Ms Filipovski said. 

Andre Reich, The Reject Shop's CEO, told Daily Mail Australia customers are looking for cheaper alternatives now more than ever during the coronavirus crisis

Andre Reich, The Reject Shop’s CEO, told Daily Mail Australia customers are looking for cheaper alternatives now more than ever during the coronavirus crisis

As well as dry-store packaged food, Tesco will also supply The Reject Shop with a range of health and beauty products in coming months as well as other household items

As well as dry-store packaged food, Tesco will also supply The Reject Shop with a range of health and beauty products in coming months as well as other household items 

Andre Reich, The Reject Shop’s CEO, last week told Daily Mail Australia customers are looking for cheaper alternatives now more than ever during the coronavirus crisis.

‘We are very excited to utilise our 354 store buying power to bring quality and innovative Tesco products to Australia, the first of which will hit all stores in early September 2020,’ he said in a statement.

‘We absolutely connect with what Tesco stands for as ‘a champion for customers – helping them to enjoy a better quality of life and an easier way of living,’ a similar mission to ours in that we are helping Australians save more money every day.’

The groundbreaking supply deal was struck four months ago and comes as the variety store looks repositions itself as a bigger and more hip player on the Australian retail scene.

The three-year agreement will see top-selling Tesco-branded pantry items - including tea, biscuits, soups, rice, pasta and baby care - being sold at the Reject Shop's stores nationwide

The three-year agreement will see top-selling Tesco-branded pantry items – including tea, biscuits, soups, rice, pasta and baby care – being sold at the Reject Shop’s stores nationwide

The three-year agreement will see top-selling Tesco-branded pantry items - including tea, biscuits, soups, rice, pasta and baby care - being sold at the Reject Shop's stores nationwide

The three-year agreement will see top-selling Tesco-branded pantry items – including tea, biscuits, soups, rice, pasta and baby care – being sold at the Reject Shop’s stores nationwide

In August, financial services firm Morgan Stanley suggested the The Reject Shop could become a $3billion stock within the next 10 years as it moves towards a younger consumer-based feeling the economic pinch from COVID-19. 

As well as dry-store packaged food, Tesco will also supply The Reject Shop with a range of health and beauty products in coming months as well as other household items.

Although both parties admit the unusual deal may take some customers by surprise, Tesco Group Export Director Jack Brabin said it will be a major windfall for Australian consumers – along with the 1.2 million British expats living Down Under.

‘We’re delighted to be partnering with The Reject Shop to provide a range of fantastic Tesco products across grocery and baby care,’ he said.

‘As the UK’s leading food retailer, we take enormous care to ensure our products are the best quality and offer great value. We look forward to sharing them with The Reject Shop’s customers.

While Australia’s retail sector continues to struggle during the COVID-19 pandemic, annual revenue for The Reject Shop was up 3.4 per cent to $820.6million in the 2019-20 financial year.

Gross profit increased 0.3 per cent to $335.8million.

Source


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