As supermarkets change their tactics, supermarket shoppers change theirs

19 December 2011

trolliesIt can’t have failed to escape your notice that the big UK supermarkets are now making more of a concerted effort to woo your custom than before. ASDA not only does it’s Price Match, but has been offering you a £5 just to check it. Sainsbury’s don’t make you go away and wait until 6am the next morning to check your receipt, but print you off a pretty little voucher at the till if they are not the cheapest on branded goods. Tesco aren’t going in for any of this vouchering, but have just reduced all their prices. Apparently.

While issuing vouchers proving you are more expensive seems an unusual way to court business, perhaps admitting you have been over-charging consumers is just as bad. Now, the Finance Director of so far un-gimmicked Morrisons has advised the FT that it is all you peculiar shoppers and your funny shopping habits that are confusing the supermarkets and threatening their lovely profits.

“While the [UK] economy was technically in recession in 2009, disposable incomes actually rose a little bit, because higher tax rates had not kicked in. In 2011, while technically the economy is no longer in recession, consumers are seeing and feeling a sizeable reduction in their disposable incomes, and those who are most cash-strapped are exhibiting very real behaviour changes to cope,” said Richard Pennycook. And he’s right- UK consumer spending held up reasonably well in 2009 and 2010, despite the world-rocking financial crisis and official economic recession. Part of the reason was undoubtedly that home-owning shoppers actually saw their disposable incomes rise owing to lower mortgage costs.

But now many consumers, even those who still have a job, have seen their incomes squeezed by rising fuel and food costs, tax increases and Government austerity measures. And Pennycook suggests they are changing their shopping behaviour accordingly.

The main behaviour change is one of attitude- people are becoming ‘professional shoppers’ – anyone remember the strop over the short-lived Tesco Price Check Double Deal- and making sure they use all available resources to secure the best deal for their pocket. Shoppers are checking prices, using deals and voucher sites, buying cheaper own-label goods and swapping money-saving tips on social networking sites. Which is a shame because I really fancied some of those Chocolate Oranges.

However, Morrisons’ FD also claims that people are clubbing together to buy jumbo packs of toilet rolls or minced meat, and then splitting them with friends and neighbours. While sharing meat and/or toilet facilities brings to mind a number of amusing puns, in the spirit of Christmas, why don’t you explore the delights of your own imagination on that one , or think of some other jumbo packs you could share with all your friends/random strangers who just happen to have a similar address.

Morrisons also think a third of their 11.5m customers have no money left at the end of the month but are nevertheless  leaving credit cards at home, choosing to pay with cash or debit card instead.

And Morrisons isn’t the only supermarket giant to comment on the changing shopper.Justin King, chief executive of Sainsbury’s, has long talked about the savvy shopper, who may buy top of the range meat, but basic tomatoes. He thinks customers now choose to shop more locally and more frequently, estimating that when customers do a big shop, they put one item fewer in their basket.

ASDA disagree, claiming those people who still want to do a big shop are doing so less often, but are putting more in their trolleys each time.

But is the UK becoming a market of “bifurcated consumers”, where the rich keep doing (and buying) what they’ve always done and the lower to middle income customers make substantial changes? No problem if you sell Botox perhaps, but less good news if your customers are those making changes.

Ira Kalish, director of global economics at Deloitte, told the FT: “There has been a substantial widening of the gap in income distribution, and so to the extent that there has been an increase in spending, it has been disproportionately at the upper end.

“Certainly in the past six months, we have seen very strong performances for luxury and other upscale retailers, and weaker performances for the retailers in the middle, and retailers that focus on poorer consumers whose incomes have been stagnant.”

So have you changed your shopping habits*? Surely it’s not possible for Bitterwallet readers to become even more savvy shoppers, is it?

*again- not interested in your other habits, thanks. I am of a delicate disposition.

TOPICS:   Supermarket

4 comments

  • spyro
    I buy all my meat/poultry at the local butcher and I've just joined costco, so while I may be spending a bit more, I'm buying in far larger bulk so theoretically over the longterm I should be spending less. Still do the weekly shop at sainsburys but am spending less per week - 60-70 pounds rather than 100.
  • christy
    Am doing most of the weekly shop at Aldi now, a bit basic but dont have to deliberate over multiple "special deals " and own brand stuff mostly good. Do the odd shop at Tesco to pick up stuff Aldi dont sell.
  • joe.king
    *again- not interested in your other habits, thanks.
  • daveyt
    yeah dont go to tescos. Always the most expensive (apart from Waitrose) overall. For branded goods, Asda always wins. mysupermarket.co.uk is great for proving that.

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