Opinion: The Marketing Society Forum - Are supermarkets duping consumers with nominal price cuts?

LONDON - Supermarkets are defending themselves against accusations of cynical price manipulation and an Early Day Motion calling for legislation to force them to publish weekly price lists of all their stock.

No - TIM DUFFY, Chief executive, M&C Saatchi Group

Shoppers aren't stupid. I'd love to think that advertising causes people to run blindly into shops and do exactly as we say, but this is just one part of a bigger story. There is a cocktail of price and value stories - reward schemes, special offers and myriad other deals. The shopper takes into account many factors; and don't forget product quality and brand preference.

Is it devious? Not really. All retailers cut prices, and smart ones do so selectively. This is hardly a revelation.

What are we to make of Professor John Bridgeman's allegation in The Guardian that most price cuts are just 1p? In my book, that is still a price cut. Where would he like us to draw the line - 5p, 10p?

But, says the cynic, the overall basket price might go up. Maybe, but the consumer now has more power and knowledge than ever. Check out Mysupermarket.com - millions of consumers do, and they can use it to compare prices trolley for trolley.

Bad for the consumer? Not really; after all, every little helps.

Maybe - MARGARET JOHNSON, Group chief executive, Leagas Delaney

This is macho marketing. The brands concerned purport to have value propositions for their consumers, but are in fact obsessed with 'not being beaten'.

While we are all moving to a much more transparent world where pricing is clear and tricks can be exposed, the reality for a busy housewife is that she trusts a value proposition and does not forensically check.

Yet, when that same housewife then discovers the brashly advertised price cuts were nominal, when all the while prices were rising more steeply elsewhere in her shopping basket, she will feel duped.

Suddenly, that short-termist 'macho' marketing strategy, that Christmas price war designed to drive shoppers into stores for 'bargains' at an expensive time of year, has undermined the faith in a long-term consumer proposition.

That trust, once gone, is not so easily restored. Asda's brand promise of 'Saving you money every day' and Tesco's pledge that 'Every little helps' don't seem so believable after all - and that's a shame.

No - NEIL HAMANN, Managing director, Dialogue141

Price cuts are a tactical way for supermarkets to promote their products and address shoppers' changing needs. Consumers are at an advantage if prices are lower. It's not about duping them, but about a competitive environment.

Consumers have become savvy in the way they shop. Many supermarkets are too focused on cutting prices to demonstrate real value to customers, however. Waitrose is an exception, and a great example of a retailer that has married value with quality at a fair price.

Value - not just low price - is an element many multiples are forgetting. Unless you can demonstrate value to the shopper, you will be constantly under threat from cheaper alternatives.

Supermarkets have to add value, and build their own brands while appealing to shoppers and understanding what drives their decision-making processes.

That's why a retailer's focus on shopper marketing is so important - it is the intersection of brand, retailer and consumer in shopping mode, and all parties can benefit from it in terms of that all-important element: value.

No - CHRISTIAN CULL, Communications director, TUI UK & Ireland

In a former life at Waitrose, where 'quality food was honestly priced', I would look at some competitor price promotions with a rueful smile. Any ruder response would hardly have been on-brand, after all.

Some of the outrage here, though, is a little inflated itself. This is a basket case, whichever way you look at it.

On the one hand, there are those customers who will gasp at the checkout or wince at the receipt before they take a closer look at individual item prices. Then, of course, there are plenty who watch every price. Those who do so out of necessity as much as choice will already be more alert to pricing changes than any industry watchdog. It's patronising to suggest otherwise.

Supermarkets stand accused of distorting the 'language of value', whatever that means. The language of value, if there is such a thing, belongs to the customer. She will express herself forcefully if she feels aggrieved.

 

The Marketing Society is the most influential network of senior marketers dedicated to championing marketing in the UK

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