Unless you’ve been on holiday or in an isolation tank for the past
week or so, you cannot have failed to have seen the media circus created
by Tesco, which purchased pounds 2m worth of Adidas merchandise from the
US and put it on sale at a 25% to 50% discount. The fact that this was
old stock and, for example, not all sizes of shoe were included, seems
to have been largely overlooked.
From a manufacturer’s point of view, this raises a warning flag over the
implications of retailers taking the so-called ’moral high ground’.
In this instance, in particular, there is a marked difference between
what consumers appear to have been promised by Tesco and what has been
Let me explain what I mean. The stock purchased by Tesco was mostly
clearance, not our current range. Yet there is nothing new in this, with
over 7000 sports stores selling limited levels of clearance stock at
prices below previously marked levels. As I have already indicated, not
all sizes of footwear were included.
Also, once the stock is sold out there is no more available to Tesco,
unless it finds another overseas source.
What would your reaction be as a consumer if you went to Tesco to buy
your bargain Adidas trainers, only to discover they didn’t have your
I think you’d feel cheated. Or if you did find your size and wanted to
ask about the correct fitting or the shoes’ suitability for a specific
sport, are you going to feel confident asking someone stacking the
shelves or at the checkout? I’m not criticising these people, but they
are hardly qualified sports-equipment retail staff, and we are a leading
This has created much amusement in the minds of critics who think
’you’re really a fashion brand, aren’t you?’.
Yes, many of our customers do buy Adidas clothing and footwear for
purposes other than sport. It’s cool to be seen wearing Adidas. However,
that image has not been created through fashion hype but by the millions
of pounds that have been invested in creating and refining sports
apparel for professional athletes and using this technology to make
better apparel for the amateur athlete.
We also plough significant resources back into sport globally. Amid all
the fuss, where is the mention of our sponsorship of the British Lions
or the British Olympic team made possible by the strength of our
Or the 250-plus grass-roots tennis clinics and soccer clinics we
The argument over selective distribution also falls flat when you
consider that Adidas equipment and clothing are sold in every high
street in the country.
Adidas is, first and foremost, a genuine sports brand and it is this
authenticity that is at the heart of our continued popularity.
We must be able to exercise some control over how and where this
authenticity is delivered to the consumer. The same goes for all branded
goods manufacturers, otherwise the future is one of decline in brand
equity, a more volatile market and a longer term loss for the consumer
over their apparent short-term gain.
Tesco has reignited the battle over whether brands should have the right
to supply retailers by turning to the grey market to buy up Adidas
merchandise, after the sports company refused to supply it.
It is not the first time. Earlier this year the retailer also bought
large numbers of Levi’s jeans on the grey market.
Tesco argues that it was breaking ’a supply blockade’ imposed by
John Gilversleeve, the store’s commercial director, said: ’Brand
manufacturers have argued against supplying Tesco because we do not fit
certain image requirements. In reality, this allows brands to preserve
high profit margins and results in consumers paying more than their US
Tesco said the savings could amount to pounds 20 on trainers and pounds
10 on Adidas’s clothing range.