Thursday, 23 April 2015

Watch Out: How Supermarkets Are Trying To Dupe You

An article in The Guardian this week has highlighted a few of the squalid tactics that some supermarkets are supposedly employing in order get the most money out of customers. And they are not talking about the phenomenon known as Shrinkflation, where the sizes of products are reduced surreptitiously while the prices stay the same or sometimes even increase.

Regarding Shrinkflation, most of us have been startled at the current meagreness of the Twix and the Dairy Milk in comparison to the old days. And I don't even want to mention the tiny tins of Quality Street now on offer - it's too distressing for words.

No, what the Guardian has flagged in terms of squalid tactics are examples like these:

1) Was/now pricing: the use of a higher “was” price when the item has been available for longer at the lower price. Acacia honey and ginger hot cross buns at Waitrose were advertised at £1.50 for just 12 days this year before going on offer at “£1.12 was £1.50” for 26 days.

2) Multi-buys: prices are increased on multi-buy deals so that the saving is less than claimed. Asda increased the price of a Chicago Town Four Cheese Pizza two-pack from £1.50 to £2 last year and then offered a multi-buy deal at two for £3. A single pack went back to £1.50 when the “offer” ended.

3) Larger pack, better value: the price of individual items in the bigger pack are actually higher. Tesco sold four cans of Green Giant sweetcorn for £2 last year, but six cans were proportionately more expensive in its “special value” pack, priced at £3.56.

Then the article writer Rebecca Smithers comes up with the reason why (although you wouldn’t know it from her reluctance to cite it as the cause) – she tells us that:

“New research suggests that more than 1,400 suppliers to Britain’s supermarkets are facing collapse as the cut-throat price war takes its toll on the industry. The number of food and beverage makers in significant financial distress has nearly doubled to 1,414 in the last year, according to insolvency practitioner Begbies Traynor.”

The key word missing from the above is ‘Competition'. It’s competition that is creating value for customers, but it is also competition that is sinking so many food stores and driving these dodgy pricing tactics for the ones staying afloat. It is precisely because the food-shopping industry is so competitive that supermarkets are trying everything they can to squeeze every penny out of their customers.

Shoppers who are price sensitive are the shoppers least likely to be duped, whereas non-price sensitive shoppers are the shoppers who won’t care or notice much (if you’re interested, I wrote a whole Blog post on this issue). 

Many people at one extreme of the spectrum will see no cause for the interference of the Competition and Markets Authority here. Many others will see this as precisely the kind of situation in which they should get involved. I'm not at either extreme on this one, so the advice I would offer to shoppers is this. If you care about what you're spending, think carefully before you buy, and only pay what a product is worth to you. Also, if these issues are important to you, call supermarkets out on any squalid tactics you notice, and see that they are exposed for their dodgy pricing. Over time this will give the advantage to more ethical supermarkets. Now if only those tins of Quality Street were bigger!!