Should there be dual pricing in supermarkets?

Myser

For some time i've been noticing that the non-Clubcard pricing in Tesco has been inflated to make it seem that the Clubcard prices are offers. This has recently been confirmed in a Which? report and it seems that Sainsbury's have also been doing the same.

https://press.which.co.uk/whichpressreleases/supermarket-loyalty-card-prices-not-as-good-as-they-seem-which-finds/

The dual pricing is confusing when you want to immediately see the price you will pay for an item. As I found at a recent trip to Tesco, if you ask for an item price check at the start of a checkout before presenting your loyalty card, you will be given the non-loyalty card price!

datz

In my opinion, the shops are free to implement their pricing strategies as they see fit, and customers can decide whether they want to engage or not. But for me, the problem with that Which? article is that it seems to focus largely on branded goods - and branded goods make up such a small part of my overall weekly shop. You could try to argue that it makes the comparisons easier, but the brands themselves exert a large element of control over pricing and promotion anyway.

For context, my weekly Saturday shop involves a trip to Tesco (at their 6am opening), main shop in Lidl (at their 7am opening), and maybe popping into Waitrose(!) on my way home (since it is directly on my route).

• Tesco: I just visit them almost exclusively for the offers they have. Great for offers on fruit and veg, as well as some other items. Offers on fruit and veg usually beat Lidl (and by a margin) - easy to compare when both have the same on offer. Also might pick up some stuff that I know Lidl don't sell. Yes, I have their Clubcard.
• Lidl: This is where I do my the main bulk of my shop. Consistently good value across the board (almost all is own-brand). At my local they do the discounts overnight, so I often pick up a bunch of stuff at 30%/60% off at opening (and freeze it) - as well as a couple of (generously portioned) fruit and veg boxes at £1.50ea. Also have their Lidl Plus loyalty app for the additional savings (tip: trigger the 10% voucher on the last week of the month and front load as much as you can onto the first week of the new month).
• Waitrose: Expensive, and terrible value for almost everything. Prices can, however, be reasonable for things they put on offer. Only stop here because it is convenient on my way home - usually grab a small handful of things (including anything Lidl didn't have in stock). Also have and use their app, which has been great (but I hear they are closing the loophole on it, though it still works for me at the time of writing).

So back to Which? - they pretty much lost me by discussing cost savings, whilst citing branded examples that are never really cost saving to begin with. I know that wasn't really the point of the press release, but anyone that cares about getting better value will already have accepted that they need to sell their soul, and allow these companies to harvest their data via loyalty schemes. Then again, I always set up loyalty apps on a secondary device, with fake or incomplete details, so I do feel a bit better about it.

dealyboy

datz said:

In my opinion, the shops are free to implement their pricing strategies as they see fit, and customers can decide whether they want to engage or not. But for me, the problem with that Which? article is that it seems to focus largely on branded goods - and branded goods make up such a small part of my overall weekly shop. You could try to argue that it makes the comparisons easier, but the brands themselves exert a large element of control over pricing and promotion anyway.

For context, my weekly Saturday shop involves a trip to Tesco (at their 6am opening), main shop in Lidl (at their 7am opening), and maybe popping into Waitrose(!) on my way home (since it is directly on my route).

• Tesco: I just visit them almost exclusively for the offers they have. Great for offers on fruit and veg, as well as some other items. Offers on fruit and veg usually beat Lidl (and by a margin) - easy to compare when both have the same on offer. Also might pick up some stuff that I know Lidl don't sell. Yes, I have their Clubcard.
• Lidl: This is where I do my the main bulk of my shop. Consistently good value across the board (almost all is own-brand). At my local they do the discounts overnight, so I often pick up a bunch of stuff at 30%/60% off at opening (and freeze it) - as well as a couple of (generously portioned) fruit and veg boxes at £1.50ea. Also have their Lidl Plus loyalty app for the additional savings (tip: trigger the 10% voucher on the last week of the month and front load as much as you can onto the first week of the new month).
• Waitrose: Expensive, and terrible value for almost everything. Prices can, however, be reasonable for things they put on offer. Only stop here because it is convenient on my way home - usually grab a small handful of things (including anything Lidl didn't have in stock). Also have and use their app, which has been great (but I hear they are closing the loophole on it, though it still works for me at the time of writing).

So back to Which? - they pretty much lost me by discussing cost savings, whilst citing branded examples that are never really cost saving to begin with. I know that wasn't really the point of the press release, but anyone that cares about getting better value will already have accepted that they need to sell their soul, and allow these companies to harvest their data via loyalty schemes. Then again, I always set up loyalty apps on a secondary device, with fake or incomplete details, so I do feel a bit better about it.

Some really cogent points @datz.

Indeed the supermarkets are private companies at the mercy of the markets and customers, if they get it wrong they won't survive.

I use Tesco a lot less than I used to, for logistics reasons, but as a moneysaver I am familiar with the Clubcard offers. My main shopping experience these days is at two branches of Sainsbury's, I am a sophisticated shopper and take advantage of the various schemes.

I know the aim of these companies is to market the pricing strategies to customers to maximize sales with the customers believing they've received bargains. This is nothing new, just more sophisticated.

One final point, I don't know why anybody should be worried about their shopping history being captured. In my case I have had many true bargains through Sainsbury's 'Sainsbury's Offers' and 'Your Nectar Prices' schemes.

maman

Myser said:

For some time i've been noticing that the non-Clubcard pricing in Tesco has been inflated to make it seem that the Clubcard prices are offers. This has recently been confirmed in a Which? report and it seems that Sainsbury's have also been doing the same.

https://press.which.co.uk/whichpressreleases/supermarket-loyalty-card-prices-not-as-good-as-they-seem-which-finds/

I think there's an issue for supermarkets trying to shift branded goods where they presumably have a good mark up. 

People are increasingly choosing to use the discounters or buying own brand /price matched items. 

I read an article yesterday about Carrefour in France. They have put labels on those branded goods that are guilty of shrinkflation to alert shoppers to the practice. This is apparently ahead of Carrefour negotiating new contracts with the brands. 

Grumpy_chap

I'd like to see just simple pricing, plain and clear.

The trouble with the Which? report seemed to be that it was conflating "sale" prices which require the rules around previous price history to have been met with the "loyalty" pricing. 
That is not a correct link to be making. 
The "loyalty" pricing is simply saying "if you buy this item right now, it will cost you £4" and "if you buy this item right now, and use our loyalty scheme, it will cost you £3.50".
The rules around price history do not apply.

Money_Grabber13579

Grumpy_chap said:

I'd like to see just simple pricing, plain and clear.

The trouble with the Which? report seemed to be that it was conflating "sale" prices which require the rules around previous price history to have been met with the "loyalty" pricing. 
That is not a correct link to be making. 
The "loyalty" pricing is simply saying "if you buy this item right now, it will cost you £4" and "if you buy this item right now, and use our loyalty scheme, it will cost you £3.50".
The rules around price history do not apply.

I might have misunderstood but I thought what they were getting at was that it used to be £3.50 for everyone, and now it’s £4 but £3.50 if you have a nectar card, thus making it look like it’s a special offer when it isn’t really. It’s hard to tell how the impact of inflation ties into all these things though because even if the absence of nectar prices, the standard price might well be £4 but equally, it could have stayed at £3.50.

Myser

Money_Grabber13579 said:

Grumpy_chap said:

I'd like to see just simple pricing, plain and clear.

The trouble with the Which? report seemed to be that it was conflating "sale" prices which require the rules around previous price history to have been met with the "loyalty" pricing. 
That is not a correct link to be making. 
The "loyalty" pricing is simply saying "if you buy this item right now, it will cost you £4" and "if you buy this item right now, and use our loyalty scheme, it will cost you £3.50".
The rules around price history do not apply.

I might have misunderstood but I thought what they were getting at was that it used to be £3.50 for everyone, and now it’s £4 but £3.50 if you have a nectar card, thus making it look like it’s a special offer when it isn’t really. It’s hard to tell how the impact of inflation ties into all these things though because even if the absence of nectar prices, the standard price might well be £4 but equally, it could have stayed at £3.50.

Exactly this, so commentators have noted that the loyalty card prices are similar to what you would find in other stores like ASDA. The artificial inflation is making it look like you are really getting a deal whereas the loyalty card price is the regular price you'd find the item elsewhere.

jon81uk

Money_Grabber13579 said:

Grumpy_chap said:

I'd like to see just simple pricing, plain and clear.

The trouble with the Which? report seemed to be that it was conflating "sale" prices which require the rules around previous price history to have been met with the "loyalty" pricing. 
That is not a correct link to be making. 
The "loyalty" pricing is simply saying "if you buy this item right now, it will cost you £4" and "if you buy this item right now, and use our loyalty scheme, it will cost you £3.50".
The rules around price history do not apply.

I might have misunderstood but I thought what they were getting at was that it used to be £3.50 for everyone, and now it’s £4 but £3.50 if you have a nectar card, thus making it look like it’s a special offer when it isn’t really. It’s hard to tell how the impact of inflation ties into all these things though because even if the absence of nectar prices, the standard price might well be £4 but equally, it could have stayed at £3.50.

Thats not how Clubcard prices are actually working in Tesco.

Need to ignore the inflation over the last year as that means the base prices have gone up anyway.
But for example I used to buy Ginsters pasty when on offer. Normal price £1.50, on special offer at £1. Now the normal price is £1.70 (inflation) and the clubcard price is £1.20. So the saving is still 50p but previously the offer price was for everyone, now its only for Clubcard holders.
There are hundreds of other similar examples at Tesco where products used to be on special offer every two months, it was predictable that something would normally be £1.70 and goes on offer at £1. Now that product is £1.90 and goes on offer at £1.20 due to inflation, but also the offer is only available to cardholders.
That seems to be the issue with the Which article, it combines the inflationary price rises with the new system of offers only for cardholders.

Its not dual pricing, its locking the special offers to card holders only.

jon81uk

Myser said:

Money_Grabber13579 said:

Grumpy_chap said:

I'd like to see just simple pricing, plain and clear.

The trouble with the Which? report seemed to be that it was conflating "sale" prices which require the rules around previous price history to have been met with the "loyalty" pricing. 
That is not a correct link to be making. 
The "loyalty" pricing is simply saying "if you buy this item right now, it will cost you £4" and "if you buy this item right now, and use our loyalty scheme, it will cost you £3.50".
The rules around price history do not apply.

I might have misunderstood but I thought what they were getting at was that it used to be £3.50 for everyone, and now it’s £4 but £3.50 if you have a nectar card, thus making it look like it’s a special offer when it isn’t really. It’s hard to tell how the impact of inflation ties into all these things though because even if the absence of nectar prices, the standard price might well be £4 but equally, it could have stayed at £3.50.

Exactly this, so commentators have noted that the loyalty card prices are similar to what you would find in other stores like ASDA. The artificial inflation is making it look like you are really getting a deal whereas the loyalty card price is the regular price you'd find the item elsewhere.

No its only that price in Asda because it is on offer, its not the regular price.

For example Ginsters peppered steak slice is on offer at the moment. Normally £1.95 currently £1.25. Its the same special offer in Asda, Tesco and Sainsbury's. Only difference is to get the special offer in Tesco/Sainsbury's you need a Clubcard/Nectar card. When the offer ends, its back to £1.95 at all three stores (and likely the Ginsters pasty will be on offer instead)
Ginsters Peppered Steak Slice 170g | Sainsbury's (sainsburys.co.uk)
Ginsters Peppered Steak Slice - ASDA Groceries
Ginsters Peppered Steak Slice 170G - Tesco Groceries

The loyalty card price isn't the regular price you'd find elsewhere, that is £1.95. The £1.25 price is the special offer price you'll find elsewhere.

Whereas in Waitrose its on special offer at £1.50 (down from £2), so their offer isn't as generous.
Ginsters Peppered Steak Slice | Waitrose & Partners

brianposter

Seems to me that these loyalty card and 2 for 1 promotions simply drive marginal customers who do not have, or have forgotten their card, to Aldi and Lidl.

I have recently started going to Lidl before going elsewhere simply because the Morrisons loyalty card promotion is so useless.

Grumpy_chap

brianposter said:

Seems to me that these loyalty card and 2 for 1 promotions simply drive marginal customers who do not have, or have forgotten their card, to Aldi and Lidl.

That might not be an entirely rational response to the Tesco Clubcard Prices or Sainsbury Nectar Prices.  AIUI, Lidl also do the same thing for users of the Lidl Plus App and I even think the Lidl Plus App pricing predates the Tesco Clubcard Prices and Sainsbury Nectar Prices.