Price Fixing in Supermarkets...

[nffc]

Another day, another tonight programme, this time it was the turn of Tesco to come under Maitland's beady eye. Specifically their pricing policy...

Basically, their research found that shopping for fruit, veg and meat was cheaper from local markets and butchers etc, than the supermarket. In addition, they noticed that Tesco, when announcing "£3 0m price cuts" were in fact including cuts on items such as organic watercress and actually putting the price of items such as teabags UP! [meaning, of course, the cost of the average shop would probably rise after the cuts!]

They investigated the claims of Tesco's advertising of special offers, basically, they hike the price up by over 100% for a short while, usually 25 days, then put on something like half-price offer, in fact, the price is MORE than the original price prior to the hike- so it's in effect confusing customers that they're getting a good deal, when in fact they're not. And of course, if they've charged it for >28 days, it's perfectly legal.

They also found that Tesco had more ASA complaints upheld than all the other major supermarkets put together- but then conceded that a minority of these were actually from members of the public as opposed to their competitors.

This provokes serious thought about whether the supermarket practice is ethical.
- Is it just Tesco that is doing this? Realistically, I would expect it to be commonplace and they're just singling out Tesco as an example. They didn't really mention other supermarkets though- would have been interesting if they had but then, there's only so much they can report on in 30 mins.
- Is this action misleading customers? At best, it's morally dubious. Of course, it will all be carefully above board legally, no doubt.

Your supprised?

Tescos are not ethical at all, how can a business grow like Tescos has done using ethical methods.

If you sell enough volume and enough different items and you have customers that buy on average 30-50 items each visit without checking each price individually you can easily manipulate the numbers to make yourself look good when in fact your making more money. Its not as if a customer can compare one weeks shop with another and quickly establish if the price has gone up or down.

[ian@huth]

I don't take any notice of advertising as a rule. We do our weekly shop and I know if prices have changed much on the items we normally buy. We particularly look for special offers such as BOGOF and take advantage of them to the max. For instance if one of the brands of coffee that we like is BOGOF we look at the use by date which is usually over a year ahead and buy several months supply. Same with toilet rolls, washing powder, etc.

Adverts which say that such and such a supermarket has been proved to be the cheapest only apply if you buy the exact same products that are in the shopping basket used. We usually use Morrisons which has the best range for our needs and works out the cheapest for us. There are a few odd things that we like from Asda and Tesco so make occasional visits to them for these things. Our next door neighbour always uses Asda which works out cheapest for their needs. The point is that there is no such thing as the cheapest supermarket for everyone. Which is cheapest depends on the things that you buy.

[danielf]

In my opinion Sainsbury's are worse than Tescos when it comes to these dodgy tactics. I know that the price of my weekly shopping at Tescos is considerably lower...

[nffc]

Originally Posted by ian@huth

I don't take any notice of advertising as a rule. We do our weekly shop and I know if prices have changed much on the items we normally buy. We particularly look for special offers such as BOGOF and take advantage of them to the max. For instance if one of the brands of coffee that we like is BOGOF we look at the use by date which is usually over a year ahead and buy several months supply. Same with toilet rolls, washing powder, etc.

Yes but typically, the price will go up an obscene amount prior to the 2-for-1 offer... sometimes making the pre-offer hike price a lot more than the price taking the offer into account.

And no, I'm not surprised, in fact, I've suspected it for ages anyway.

Would have been nice to see the programme make a comparative study of the supermarkets, instead of just singling Tesco out- but as I said in my original post, there's only so much they can cram into a 30 minute programme, and they don't have adverts during or after it on a Monday!

[andygrif]

Originally Posted by nffc

Basically, their research found that shopping for fruit, veg and meat was cheaper from local markets and butchers etc, than the supermarket.

I can speak from experience here. I stopped shopping in Tescos and moved to M&S for most groceries, mostly due to stock issues, but also one of quality. Whilst price is important to me, the background of the produce that came from Tesco troubled me and M&S are better, but not perfect.

However one thing that M&S are just as bad as Tescos at is veg. It is bland, uniform and usually dry - but we've all been conditioned to accept it over time...trust me on this, go and buy an organic carrott from a local farmer and you'll find it really does taste of carrott - unlike the supermarket version.

So we started going to out local farm shop...they're actually pretty good as anything they don't grow themselves (they do five types of potatoes, onions, sqashes, cabbage, etc...good british veg!) they get from Covent Garden a the day before.

We buy 10kgs of any of the five types of potatoes for £3. They're fresh out of the ground that week, they're juicy and tasty and each have their own flavours and shapes and sizes.

Compare this to Tesco where (if you're lucky enough to find a bag of potatoes on the shelf) you get this bag filled with modified air (to stop them rotting for the couple of weeks it takes to reach the shelves) everything is the same shape and size, is grey in appearance, dry and utterly tasteless...oh and three times the price!

Originally Posted by nffc

including cuts on items such as organic watercress and actually putting the price of items such as teabags UP!

This is poor, as you say totally legal...but morally poor. There are goods, and tea bags is one of them (also included are things like milk, bread, cheese, etc) that are magic goods for retailers. These are goods that we put into the basket without checking the price (speaking generally) or knowing how much they are at the retailers' competitors.

Originally Posted by nffc

This provokes serious thought about whether the supermarket practice is ethical.

It's a no-brainer for me. The answer is no...and when you know more of the stuff they get up to, you'll be even more sure that they are immoral to the extreme.

Things like the treatment of farmers, where they order a years' supply of, say, potatoes...so Mr Farmer prepares his land for 'x' million seeds to be planted. Just before the first harvest Mr Tesco Buyer calls up and cancels the order as he's got a better deal from some farm in Spain. This farmer has lost not only his entire crop for a whole year, but also the revenue that goes with it....plus is left with a tens of thousands of tonnes of almost ripe potatoes that he can't sell to anyone else.

There's a couple of books I would strongly recommend you read to get a fuller picture:

Not on the Label and Shopped - both very enlightening reads. I bought a bread-maker after reading the first one!

[danielf]

One thing I noticed/suspected at Sainsbury's, is where the item on 'offer' is reduced by a few p, and the price of competing products is increased. So, the sale item is marginally cheaper, but looks a lot cheaper compared to the rest. Bwastards...

Like Ian said, I tend to take offers with a rather large pinch of salt, and I know the approximate price of most items I buy regularly...

[ian@huth]

Originally Posted by nffc

Yes but typically, the price will go up an obscene amount prior to the 2-for-1 offer... sometimes making the pre-offer hike price a lot more than the price taking the offer into account.

And no, I'm not surprised, in fact, I've suspected it for ages anyway.

Would have been nice to see the programme make a comparative study of the supermarkets, instead of just singling Tesco out- but as I said in my original post, there's only so much they can cram into a 30 minute programme, and they don't have adverts during or after it on a Monday!

I have never seen such a significant price rise on any product that has had a BOGOF offer. Morrisons always seem to have one brand or other of coffee on BOGOF all the time. Maxwell House is the current offer and the price is £2.95 same as it has been for a couple of years.

I have seen BOGOF offers used to soften the blow of price increases but not on popular items. They may put the price up from £2 to £2.20 but introduce the BOGOF at the same time as the price increase so that you are getting two for your £2.20 instead of the normal one for £2. This often lasts for several weeks so that you are accustomed to seeing the new price before it actually hits you in the pocket.

[andygrif]

Another trick is that the supermarket will get a new product in from a branded supplier, then copy their product and slap an own-brand label on it. After this they will order less of the branded product, so people are forced to buy the own brand one...then the supermarket delists the branded product citing poor sales.

Clever eh?

[nffc]

Originally Posted by andygrif

There's a couple of books I would strongly recommend you read to get a fuller picture:

Not on the Label and Shopped - both very enlightening reads. I bought a bread-maker after reading the first one!

I've read the first one... scary to say the least.

please don't get me started on 'supermarket' pricing

- bogof is paid for by the supplier, not the store, when a retailer tells you they have a price reduction, their supplier has suffered that decreased margin.

all the suppliers can do is merge, using venture capital, and hope their brands can survive in the 'paid for' own label business which guarantees the volume

- not on the label is brilliant

http://www.amazon.co.uk/exec/obidos/...855605-8134216

[ian@huth]

Originally Posted by andygrif

Another trick is that the supermarket will get a new product in from a branded supplier, then copy their product and slap an own-brand label on it. After this they will order less of the branded product, so people are forced to buy the own brand one...then the supermarket delists the branded product citing poor sales.

Clever eh?

Not really clever. Many people like having the better known brands and will pay the extra for them. If you don't stock the top brands you run the risk of high customer churn. You have to also take account of how supermarkets make their money, it is not just from sales. They make a nice profit from selling shelf space and positioning to the major brands.

I prefer own brand goods.But then I hate hype and I found that baked beans and toilet rolls don't differ by much.I always but the cheapest savers choice as well..Why pay 35p for tinned tomatoes when I can get them for 18p in the budget range?

The only thing I make a fuss about is veg and meat.Saturday market for the former and a trot to the local butchers for the latter.Supermarket meat(apart from Waitrose) is crap.

Originally Posted by ian@huth

Not really clever. Many people like having the better known brands and will pay the extra for them. If you don't stock the top brands you run the risk of high customer churn. You have to also take account of how supermarkets make their money, it is not just from sales. They make a nice profit from selling shelf space and positioning to the major brands.

absolutely correct

- they also charge us for travel expenses, hotel bills, etc, when they come to visit, which is at their whim, however many times a year

Originally Posted by danielf

In my opinion Sainsbury's are worse than Tescos when it comes to these dodgy tactics. I know that the price of my weekly shopping at Tescos is considerably lower...

My weekly shopping is cheaoer at Morrisons than what it is at TESCO, a few weeks ago I went to TESCO because I was in the area, my shopping came to over £100 I bought the same stuff to what I buy at Morrisons, £30 more I said to my missus something is not right here. Last night said it all.