Consumers have been bombarded with price adjustment and discount messages from UK supermarkets this month. Ask retail experts if this strategy actually works.
After splurging in December, January is a tough month financially for consumers as they look forward to payday. To target these cash-strapped shoppers, British supermarkets are busy rolling out price-focused campaigns.
Sainsbury's has run ads challenging its expensive reputation, using padlocks to show it will not raise prices in Morrisons' 'Price Locked Low' campaign.
Meanwhile, Tesco ran a cover ad in the Metro newspaper touting a 5p cut in the price of its branded beans, and Ocado rebroadcast a TV ad from last year in which a woman was buried alive by a pound sign falling from her. It showed how it turned out. Cupboard.
In a sign of how tough things are here, Tesco is running a full-page advert in the Subway promoting tins of its own brand beans for as low as 5p. pic.twitter.com/6FaHjeBcpR
— Andy Hay (@Wolverinesclaws) January 11, 2024
Price-matching campaigns and in-store campaigns by competing supermarkets have also been rampant this month. Even Aldi, one of his cheaper retailers, has in-store price comparison ads, which he compares prices to Tesco.
Asda has taken the bold decision to announce a price match campaign across 287 grocery items, reducing prices by 17%. The company advertised the introduction of this system in TV commercials and conducted extensive marketing at stores.
This strategy has sparked debate over whether price matching is a worthwhile strategy or could do more harm than good. Rob Sellers, former head of retail at Gray and VCCP, said the prices were “outrageous” and said: “I completely understand how Aldi and Lidl are smart about spending money on advertising to tell the world how cheap they really are. I can’t,” he added.
And when Asda says it matches the prices of 287 grocery items, it is “essentially saying that the prices of 10,000 other items in the store are not matched.” explains Sellers. Instead, he says retailers should focus on what they can offer beyond price. For example, Sainsbury's has a wide range of food products, M&S and Waitrose are “particularly strong”, while co-ops have locality and community to rely on. .
“The great thing about Asda is that it's so big, they have toys and fun clothing and they have a really good selection of world food. Asda has everything for the family.
“Every supermarket plays a different role, and supermarkets should be themselves. They should talk with enough confidence about what makes them different in terms of the total value equation, and then use price as a reassurance factor. is needed.”
Ivo Petrov, category manager at Walmart Canada, looks at Asda's price matching strategy and believes it is likely to cause concern for investors and negatively impact its balance sheet in the long run. “Matching is a terrible short-term Band-Aid that usually comes at unsustainably high costs.”
Mr Petrov, who has previously worked at Target and Lidl, said the main problem was that Aldi and Lidl had completely different business models “designed from the beginning” to offer cheaper prices. talk.
Instead, it praises Marks & Spencer's strategy of “consistent core messaging” about quality. “While its evolution has been affordable, it has never crossed the line of claiming to be a price cutter or lowest price.” Conversely, for Asda, Petrov said, “there is a lack of a consistent identity and a lack of support for that identity.” “The lack of a strategy is a serious Achilles heel for any organization.” Matching prices and quality only scratches the surface. ”
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Despite retail experts claiming that price matching is harmful in the long term, Brian Roberts, head of global insights at IGD, said that Tesco and Sainsbury's were not able to avoid Aldi's price matching. He points to the fact that both companies have concluded that it was a “huge success.”tesco evaluated that the price matching scheme with Aldi greatly contributed to expanding market share in the third quarter of 2023 financial results.
“As part of a wider package of measures including loyalty pricing, everyday low prices and 'price lock', price matching gives shoppers peace of mind that they don't have to go elsewhere to get a lower price.” , clearly successful. It’s an important item,” Roberts said.
However, he added that it was essential that Asda continued to innovate its Asda Rewards loyalty program and improve its own labels to support price matching. If Asda does these things, “there's no reason its new initiative won't be successful. In fact, it wouldn't be too surprising to see other retailers follow suit.”
There is no concrete evidence that price matching drives foot traffic to specific brands. But Fraser McKevitt, head of retail and consumer insights at Kantar, says retailers' desire to match prices is an indicator of their effectiveness. “[Price matching] Retailers clearly see this as a very important way to show shoppers how they offer the best value.
“Grocery is a highly competitive market, with consumers visiting more than three major supermarket brands a month on average, so retailers cannot afford to be complacent.”
