Tesco pricing differences, in same town

UK2010

brightonman123 wrote: »

each store doesnt order their own stuff, direct, do they? i am sure Tesco HQ must buy in bulk, and get damn good prices across the board - regardless of size / location..?

Yeah that keeps the cost of the stock down. The rent/cost of land each store has will be different. The smaller ones will cost more. They'll just have a price band for different rents. Almost all retailers that have different format stores do the same. In other words the prices will reflect the local running cost.

The stock cost doesn't really matter. Tesco has a net profit margin of 3.99% http://www.google.co.uk/finance?q=LON:TSCO If all the stores with highers rents/overheads sold the stock at the same price as the main supermarkets they may well make a loss with a margin of 3.99% so what would be the point in having them? They'd have to sell at a higher price.

And with a net profit margin of 3.99% can you really complain about the prices. People do not know how cheap food is in this country!

CG19a

Could there have been a day or so in between checking the price? The reason I ask is that although express stores do charge more I've never known it to be as much as the difference you mention.

It could have been that there was an offer finishing on the Jamesons at £15 and it was going back up to £18.38. It can be difficult to tell this on the last day of the promotion. The way the labelling system works is that a yellow (offer) label is printed on the first day of the promotion, then on the last day of the promotion a white (non-offer) label is printed even though it is still on offer. So if the offer price was £15, the white label is still £15 it just doesn't say save£3.38 on it. Then the day after the promotion a new white label is printed putting the product back up to its original price.

brightonman123

Morrison have blown this out the water, got there for just £12.67 -
in a v nice silver bottle, too!

Becles

brightonman123 wrote: »

each store doesnt order their own stuff, direct, do they? i am sure Tesco HQ must buy in bulk, and get damn good prices across the board - regardless of size / location..?

Each store manager has authority to order in or delist items depending on local demographics and customer spending. I do merchandising for companies and have to speak to managers regarding stocking levels. The decision on stocking particular items depends on how well they think the stuff will sell based on what local customers buy.

I was working for a company that makes an expensive fruit juice drink. One Tesco in a small town with a lot of pensioners and families on low incomes or benefits couldn't even sell the drink when it was on a half price promotion. They delisted the lot due to the high waste. A few miles up the road in an affulent commuter suberb for a nearby city, the drink was literally flying off the shelf!

BexInLondon

Prices can vary even in between Express branches. There's one near where I work, opposite a Lidl, and the prices there are about 5% lower than at the Express branch by my house. The one near the Lidl stocks a lot of Tesco basics, whereas the other doesn't. I assume it's based on demographics (home one is near lots of posh offices) and local competition (got to be cheap when Lidl's close by!).

I think it's fair enough really. What bothers me more is that the one near my home seems to be using prices on alcohol very aggressively so as to flush out the independent wine shop over the road! 9/10 window displays are of cheap wine and beer.

fluffnutter

The Co op prices vary as well. The one nearest me sells their own claret for £5.99. The one a mile or so away does the same wine (same vintage etc.) for £4.79. The somerfield attached to a garage a bit further away (which are now Co ops really) does it for £3.99.

V confused! I did point it out but was met with the dull gleam of idiocy.

el_gringo_3

At Tesco its nothing to do with Economies of scale, more what they can get away with according to the time of year, local customer base, local competition and even the day - I know of one store which deliberately 'holds back' value yorkshire puddings on a sunday (for example) as the customers are likely to buy the next price level up, and will fill the shelves ready for Monday after the customers have left. Another has far cheaper frozen food and far more expensive fresh produce, but they have a poundstretcher and farmfoods across the road, yet the nearest grocer is 2 miles away. In the cities 'flagship' store you can even find the same bag of rice priced cheaper on the 'Asian Specialities' isle than on the 'world foods' isle, simply as there is a large customer base of price sensitive working class asian families and style conscious young professionals.

I believe the co-op is slightly differently organised, in that one co-op maybe associated to a different local cooperative structure to another down the road, so pricing could be down to how many members they have.

jamespir

we have a fairly big store and they seem to be so tight when it come to offers and stuff