How Competitive Are The Major Supermarkets?

23 November 2009, 21:53 pm
Speciality Bites by Paul Hargreaves

Do consumers save money by driving to the so-called cheapest supermarket? Not always it would seem.

I want to expose the myth that supermarkets are cheaper.

Consider Asda’s recent announcement that a list of selected items would all be sold at a fixed price of £1 each.

It turns out that almost one in five of the items were selling below £1 before the offer. But that didn’t make any difference…the punters flocked in their usual thousands to take advantage of this ‘great offer’ and at the same time spend much more on all the other temptations put in their way.

The anomaly in the offer was exposed in The Grocer magazine (August 1st 2009), a trade publication not generally seen by the general public.

When going into a supermarket to shop we almost inevitably come out with many more items than we intended to buy.

That’s how the big retail chains do it. It’s nothing new; the trade term is a ‘loss leader’.

A more realistic and down to earth description would be ‘a sprat to catch a mackerel’.

So why don’t we mackerels take another look at the independent food shops, we might even save some money?

The range of shops in the independent sector is breathtaking; great delicatessens, wine stores, retailers that sell the best coffee and tea around and of course genuine health food stores.

Interestingly, the market share of the independent sector is rising.

Fruit and vegetables will be cheaper in many independent stores and fresh meat will be what it says it is.

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