Tesco, the UK’s largest retail and grocery chain, is launching an initiative to sell concert tickets without added fees, a first for the company and a move that could instantly make it a force in the country’s ticketing industry.
The plan calls for the retailer to offer tickets to several outdoor shows at venues at horse racing tracks in the UK this summer, as part of a family friendly entertainment package. Prices will start at £12 ($19.72) per ticket and be capped at £33 ($54.22). The tickets will be delivered free of charge, and there will be no other fees tacked onto the purchase.
“We know customers want to buy tickets for live music events but are often faced with unexpected and additional fees,” Rob Salter, Tesco’s entertainment director, said in a statement.
The company reportedly plans to expand its ticket offerings to more concerts/venues in 2012.
Unlike in the U.S. where a single primary ticketing company, usually Ticketmaster, sells tickets for a venue or tour, in the UK, several primary ticketing companies might sell tickets to the same event. So, Tesco’s decision to sell tickets without fees could save fans as much as 25 percent of the face value of the ticket, when fees and shipping costs are included.
Essentially, Tesco is using a similar philosophy that U.S. retail giant Walmart often uses, where the company’s massive scale means it can keep margins low, squeezing its competitors in the process.
Such a move puts pressure on those other ticketing companies to consider either lowering or removing their fees altogether. For example, for James Blunt’s July 15 concert at Newmarket Racecourses, Tesco is selling Grandstand and Paddock level tickets for a flat £29 ($47.53) each, while See Tickets tacks on an additional £2.32 ($3.80) in booking fees and £4.80 ($7.87) in transaction fees for similar Grandstand and Paddock tickets. The fees bring the total cost for the same tickets from See Tickets to £36.12 ($59.20).
Tesco will sell tickets through its Web site, and according to the e-commerce trade association the Interactive Media in Retail Group (IMRG), the company is the UK’s third-largest online retailer, behind only Amazon’s UK site and housewares retailer Argos.
“We wanted an offer that was really simple – one ticket, one price, no hidden costs,” Salter said.