Deflation coming to a supermarket near you?

Graham_Devon

Quite a story on Morrisons today which leads into the big four and what could be some welcome deflation in the price of our food goods.

Morrisons have today anounced on the back of "poor" results that they are to cut prices across the store. And it seems this isn't just 1p off a baguette. It appears this is a long term strategy to take on Aldi and Lidl's.

Of course, this impacts the other 3 big supermarkets, as they too will have to compete with Morrisons.

All of this seems to come on the back of the squeezed consumers who are searching elsewhere for deals, but more importantly, finding them and leaving the supermarkets for staple goods, only entering the supermarkets for the offers. This is a problem as those stores all have fixed running costs.

So could we see a real price war? Not one based on various gimmicks? (Though I noticed Tesco have come out with a fuel save gimmick very recently which has you jumping through "spend it by the end of the month" hoops).

Morrisons have shelved 12% of their share price today. Sainsburys 8%. Tesco 5%. Investors fear lower profits. Consumers say thank you very much...

What worries me slightly is shelves full of tinned spam etc back with avengence!

http://www.bbc.co.uk/news/business-26558110

wotsthat

I'm not surprised at Morrisons results - they aren't particularly well run, were too late to online, too late to convenience and are maintaining excessive space for their predominantly elderly and low income groups.

What did surprise me is that any credibility is given to claims that Morrisons are going to take on Aldi or Lidl in a price war. What's been missed is that Aldi aren't just cheaper but massively more space efficient. Instead of an aisle of pasta they got just a few choices - Morrisons can't do the same because they've already got too much space to fill.

It's madness - they've got market street, their own supply base and a provenance story that's enviable - they should be adding value not taking it out. Their reason to be is staring them in the face but some bright spark thinks their 'space' is low cost.

They spend so much time gazing internally they'll be late to any price war they start anyway and lose even more market share as a result.

Graham_Devon

Isn't the "one type of pasta" Aldi's downfall though at the same time?

We want choice. I've not used Aldi, but I've used Lidl on occasion and yes, some products are good value for money. However, I often found things out of stock. I certainly couldn't do a full shop there... though if I'd wanted some sock warmers and a bike frame to go on the back of the car I'd have been thrilled by the jumble sale type arrangement taking over the middle of the store.

I think Aldi and Lidl have their place. However, you always need the bigger supermarket to get everything else that you can't get in Aldi and Lidl.

If the big supermarkets can crack this, they will be on to a winner, IMO.

Oh and it's the same for Morrisons. The total choice of one mens shirt is hardly what you could class as a "clothing range". So either make the space and do it proper, or get rid and keep it to the bigger stores. At least Tesco have this cracked and have their stores categorised by the range inside them.

daveyjp

Graham_Devon wrote: »

Isn't the "one type of pasta" Aldi's downfall though at the same time?

I think Aldi and Lidl have their place. However, you always need the bigger supermarket to get everything else that you can't get in Aldi and Lidl.

.

That's what we thought until an Aldi opened the same distance away as Morrisons. My visits to morrisons in almost 6 months have been to the cashpoint and bottle bank. We have found no need to use them for groceries.

tomterm8

It is terrible that my immediate thought when reading the title of this thread is that 'deflation' was being used wrongly.

Deflation being the reduction of the general price levels in the economy.

What the thread title should say is 'Price cuts' or 'Price war'.

wotsthat

Graham_Devon wrote: »

Isn't the "one type of pasta" Aldi's downfall though at the same time?

We want choice. I've not used Aldi, but I've used Lidl on occasion and yes, some products are good value for money. However, I often found things out of stock. I certainly couldn't do a full shop there... though if I'd wanted some sock warmers and a bike frame to go on the back of the car I'd have been thrilled by the jumble sale type arrangement taking over the middle of the store.

An aisle full of pasta isn't really offering a choice when 90% of it are differences in branding rather than product. Aldi have a few pastas and they're all OK. Believe it or not when you sell stuff to the big retailers the customer is rarely mentioned - they've become complacent in thinking we'll just keep buying what they choose for us to buy.

Yes they have some random offers but apparently they sell really well.

Graham_Devon wrote: »

I think Aldi and Lidl have their place. However, you always need the bigger supermarket to get everything else that you can't get in Aldi and Lidl.

If the big supermarkets can crack this, they will be on to a winner, IMO.

They had cracked it but got greedy and started taking the customer for granted.

Graham_Devon wrote: »

Oh and it's the same for Morrisons. The total choice of one mens shirt is hardly what you could class as a "clothing range". So either make the space and do it proper, or get rid and keep it to the bigger stores. At least Tesco have this cracked and have their stores categorised by the range inside them.

Morrisons don't do anything quite right. One of their problems is that the Aldi shopper who wants to buy some, say, nicer pasta on occasion will go to Sainburys and not Morrisons. Sainsburys are losing sales to Aldi but not completely losing the customer. Morrisons are losing the customer.

My money (literally) is on Sainsburys and Aldi. Morrisons shares might be worth a punt though - eventually someone will buy them and do it properly.

purch

wotsthat wrote: »

Morrisons don't do anything quite right.

It is a shame that Morrisons as a group is so poorly managed.

They sell the best fresh meat and fish of all the mainstream supermarkets, certainly better than Tesco, Asda or Sainsbury's, but overall their offering cannot compete with the big guys.

chucky

Graham_Devon wrote: »

Deflation coming to a supermarket near you?

I see no mention of Deflation in the article. If anything it will become a price war between supermarkets nothing else.

Either you don't understand the definition of Deflation or you're trying to get some attention for a change.

N1AK

Graham_Devon wrote: »

deflation

onlyroz

daveyjp wrote: »

That's what we thought until an Aldi opened the same distance away as Morrisons. My visits to morrisons in almost 6 months have been to the cashpoint and bottle bank. We have found no need to use them for groceries.

Agree. I can get the vast majority of the staples from Aldi, and my local butcher, and find myself buying less and less from Mr T. You don't need 20 types of pasta and 10 brands of baked beans. And you shouldn't need a calculator to figure out which brand of cheese is the cheapest.

antrobus

chucky wrote: »

.... or you're trying to get some attention for a change.

What do you mean "for a change"? Are you new here?:rotfl: