Competitor or consumer – who is the enemy in the supermarket price war?

We'll match anything. Fell over in Sainsbury's? Come to Tesco - we'll push you over twice. (Never said by anyone associated with Tesco). Image Credit: Martin Bodman.
We’ll match anything. Fell over in Sainsbury’s? Come to Tesco – we’ll push you over twice. (Never said by anyone associated with Tesco). Image Credit: Martin Bodman.

If you have ever watched The Big Bang Theory you will be familiar with the game ‘Rock, paper, scissors, lizard, Spock’. It’s exactly like rock, paper, scissors, with added Spock and lizard. But this version of the game needs to step aside, because here in the UK we have a new one: Tesco, Lidl, Morrisons, Asda, Sainsbury’s. It’s a game that has been fiercely played for a couple of years now, but with Christmas coming, the T-L-M-A-S Winter Olympic Championship Tournament League Cup Derby is about to begin.

The prize is a big one: Britons beat even Americans in terms of festive spending, on average splashing out £700 each on festive goods. (Our grandparents would like to remind this point that they only got an orange and the chance to stuff onions into the Christmas dinosaur). We spent £43billion in the last two months of 2013. That’s a sum that is worth fighting for a piece of.

But what is this war being fought for – liberation or occupation? Obviously businesses must make money, but that doesn’t mean they are always out to manipulate us. Conversely just because we are the consumers doesn’t mean we are the ones in control. So while Tesco and Asda staff may meet in each other’s car parks at night and throw stale doughnuts at each other to determine who has the cheapest grapefruit, are the consumers actually benefiting?

Let’s get the obvious benefit out of the way. All this competition has dropped the price of food. After a 0.1% rise in October, food prices were down 0.2% on 2013.

I suppose we could to stop this post now. Yes, it’s lowered food prices this Christmas. That’s a good thing. Let’s all go and buy some After Eights.

But is this not just another way of price-fixing? This is where two or more companies agree to sell the same products for an identical price. With people unable to find it cheaper somewhere else, they have no choice but to pay that price, one that is usually high. With supermarkets only competing to get our attention by matching other supermarket prices they are not trying to give us a good deal, they are simply removing any incentive for us to shop elsewhere. While as customers we are used to looking around for the lowest price, supermarkets are trying to take the initiative away from us by monitoring prices themselves and automatically matching.

[bctt tweet=”Is supermarket Brand Match just price fixing by another name?”]

And if we could have spent less we get a voucher for the difference, even if it’s a single penny. It’s not technically price-fixing, and even if it was the government would have to prove that the supermarkets had colluded together in order to do anything about. But it does raise an interesting question. Sometimes this practice drives down the price of food, however the statistic earlier about the lower price of groceries is not all to do with supermarket price wars. A drop in oil prices has made it cheaper for certain foods to be produced, as well as making distribution less costly. That’s an outside economic factor. That has nothing to do with supermarkets battling to give us the best deal.

And if all Tesco is doing is trying to make its prices identical to Asda’s, are they really even trying to give us the best deal? They are all fighting to keep their customers. That’s what this is about, as no one who shops at Sainsbury’s is going to decide to shop at Tesco because the prices are the same.

But the supermarkets aren’t entirely oblivious to this problem. The price matching system is now firmly entrenched and can be left to its own thing. It may have solved a problem for the supermarkets in the short term, but now they are getting back to the original issue: trying to steal customers from their competitors. How can you do this, when your prices are identical?

It seems the answer for some supermarkets, on some occasions, is ‘dishonestly’.

[bctt tweet=”One supermarket claims to be cheaper than another, but what aren’t they telling you?”]

You’ve probably seen the adverts now, which all the supermarkets seem to be doing, where they show the price of an item of food or drink in a rival supermarket and then give their own, much lower price. So at first glance it seems that Asda’s unicorn litter trays are indeed cheaper than Tesco’s unicorn litter trays. Except that when you look at the small print at the bottom of the screen, you will see that the reason for the huge price difference is usually because the advertising supermarket is running a sale. They have gone into their rival supermarket to find the price of these items, then deliberately put them on sale at a lower price. They then advertise them as though they are just naturally cheaper, knowing that many people won’t bother to check out the small print, or think too far into the matter.

So who is fighting whom? Are the wily consumers, with their demands for affordable goods the enemy of supermarkets, or is it the rival brands who are being targeted? Because matching prices actually does nothing for the consumer. It just forces you to remain shopping with your chosen supermarket, or to move for no reason. And competing on price point for one single item in a store full of millions seems like a cheap and pointless tactic. It’s like going into McDonald’s and ordering the jumbo large deep fried butter lard burger with extra battered chips meal and then asking for a Diet Coke.

[bctt tweet=”Two supermarkets battling over the price of one item doesn’t solve a problem for the consumers.”]

How things change – the place that was

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I’ve given up and accepted the fact that I have to think about everything. Nothing just happens anymore. It goes into my head and gets chopped into tiny pieces and comes out again as a thousand questions, like pasta through a spaghetti cutter. It’s kind of annoying on occasions. I suppose the opposite would be to be totally vacant at all times, and that would be far worse.

What prompted my latest period of introspection was the fact a new Sainsbury’s has been built nearby. I like Sainsbury’s. Mostly because they have an apostrophe in their name. It’s the little things that count.

The location of this new store is in a very narrow field between two main roads, a sort of splinter of green land between the town I live in and the roundabout you need to go to in order to access the A roads which start you on the path of escaping Cornwall. Sainsbury’s new location is about 500 yards from a Tesco in one direction, and 500 yards from a Morrisons (no apostrophe, note) in the other. Penzance is only a small town. We now have more supermarkets than things to do.

Of course the locals complained

Penzance – in fact, Cornwall is general – is one of those places that time forgot. Or rather, the Cornish were offered time, didn’t like the change, and decided to stick with measuring the sun, thank-you-very-much. Anything new happens, the locals are up in arms and a committee is formed to protect the local landscape. As happened with Sainsbury’s. It was destroying the local landscape; spoiling the view.

What existed in that spot before Sainsbury’s was a tiny heliport: a large, rusty metal warehouse where the helicopter slept, and a small white shack that served as the departure lounge.

It’s not so much about Sainsbury’s itself, I don’t think. The locals here just don’t like change. When the local college was revamped, they erected a small Wind Turbine for the science students. Residents of one village claim they can hear it spinning, and they live a mile away. I’ve stood right underneath it, and it would be drowned out by a car driving past.

The shifting nature of a place

A couple of weekends ago, we went to explore the new store. As I said, there’s not much to do down here. It was an event. The local road now has a roundabout in the middle so that middle class people who desperately aspire to shop in Waitrose can buy Jamie Oliver products in orange plastic bags. We pulled up into the car park, with its slick, freshly tarmacked surface and its crisp parking bay lines. I stood in the car park then, faced by the glowing juggernaut of the new store (it was night time; the whole thing was quite beautiful, with its flowing roof, stone walls and wood cladding), and remembered that this used to be a field.

A field in which I had never been, but had driven past probably thousands of times in my life. I knew that field. It was green, full of helicopters and rabbits. It didn’t change at all in the decades during which it sailed by the car window.

But now, it is something completely different. The green grass is hard black car park. The rusty old helicopter hutch has been replaced by a gigantic structure, big neon orange signs everywhere. People who would never have set foot in a mere field now flock to buy croissants and wine and balsamic vinegar and Potpourri.

Which is funny, isn’t it? It’s like looking down at your body to find you’ve got donkey legs. Something so consistent, so unchangeable, has been completely transformed. Perhaps it’s grown up, like everything does? Perhaps that’s what the residents in Cornwall are afraid of? That one day they will wake up and everywhere will be carpark and aisles of fridges full of posh yoghurt.

We went inside and explored the new supermarket. It was very nice. I bought the latest Stereophonics album, which is also nice. I’d never have found that in a field with a helicopter.

And in ten years’ time, it will be hard to believe that there was ever a time when Sainsbury’s wasn’t there. I’d love to have some kind of siren go off in my mind at the exact point where it became pedestrian, so I could appreciate the moment it transitioned from something new, and worthy of considering, to something to take for granted. Something as permanent and unchangeable as a thin field with a spluttering old helicopter in it, and a few surely deafened rabbits.

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