And here's how Tesco pulled it off...

Recently Tesco posted the largest profits ever recorded by a UK retailer and thereby managed to buck a trend in times where one retailer after another is going into administration. Many people have probably wondered how they managed to pull this off and there has been a lot of speculation that as people are not eating out as much, taking fewer holidays, buying fewer luxury goods etc. this would increase Tesco's profits.

However, I recently discovered the secret. It's got nothing to do with ANY of the above factors. Rather, it is a very creative use of one of the 4 Ps of Marketing, namely "Price".

Last week at my local Tesco, there was a special promotion where you could by two bottles of soft drinks for only £1.60. That does sound reasonable, and a lot better than paying £1 a bottle at my local cornershop.

The kicker, though, was that most of the products were priced individually at less than 80p (as low as 67p as seen in the picture above). I know that Tesco think its customers are mugs, but that's just taking the p....

The most expensive product I saw was 97p so if you bundled the cheapest and the most expensive the special offer would have given you the amazing savings of, er, 4p or 2.5%. Yippee! They probably hoped people would buy the Orangina at 79p a bottle and overcharge them on each one as we all know that margins are notoriously slim in retail.

Terry Leahy's business teachers at UMIST would have been so proud ;-).

I've also realised that it doesn't really matter which supermarket you buy your food from as it all comes from the same place anyway. On this picture can see a bag of "Tesco" Organic Pears that I grabbed earlier in the week, with the pears having "Waitrose Organic" stickers on them. Briliant!