nickshanagher

What to make of all these price-match guarantees in the supermarkets? A profit guarantee for the shops offering them, suggests the Economist . In a column last month it says price guarantees were a way of stopping a price war rather than participating in one. This is because when a newcomer offers lower prices it is trying to win your customers. If you promise your customers that you will match these prices then they will stay with you. The newcomer then has to give the price cuts to its existing customers without winning new ones and loses money. In real life it is not as simple as that. However, the Economist says that most consumers believe that price-matching signals genuinely lower prices. The consumer is wrong as it is more expensive supermarkets that are offering to match each other’s prices. The lower prices are at Aldi and Lidl. The response of wholesalers and consumer packaged goods suppliers is to price mark product for independent shops to signal value. There are ...

A short item on the Sun's City pages notes that high street sales were up in April by the highest number for that month in nine years* and linked the good news story with Booker's results. Wholesaler Booker is a good bellwether for the go ahead independent shopkeeper who is investing in their business. Booker, the Sun reported, said that customers were shopping locally and the paper reported that its Premier store chain had achieved a 10 per cent rise in sales. Wow! The Sun's paragraph may skew the facts but it is a great warm story about the success of local independent shops. Over in the FT, comment on Booker was missing. However, this does not mean the company is lacking fans. Analyst Dave McCarthy of Evolution Securities says it has world class management and is investing sensibly in development. While some of the upside comes from India and foodservice, it is also doing a great job of serving local shops. The secrets of Booker's success are not secret. They m...

Steve Fox, retail sales director at wholesaler Booker, has put down a marker for what he thinks is important for local shops to focus on in 2010. This week, just as City analysts were fretting over a higher than expected rise in retail prices, Booker has announced a deal to keep the price of bread and milk low until the end of September. "Bread and milk are the two most important products [for] convenience stores," says Mr Fox. "By guaranteeing the price to September, we are giving our customers the confidence that they will be able to offer their shoppers consistent pricing that helps them to compete with the multiples." Consistency is an important word. As a local retailer you need to be able to promise your shoppers that they will always find good value in your shop. As footfall driving categories, you need to have good prices on bread and milk to set the tone for your overall offer. The independent sector needs strong pricing support like this. Think about how e...

Reports last week say that Walmart has cut the prices on 100 popular toys to below $10 as they expect US shoppers to put a value-for-money focus on Christmas presents. Three multiples, the other two are Target and Toys R Us, determine what happens in the toy market and the major suppliers are ensuring that most of their toys are priced at less than $30. In the UK this week, Tesco talked up the optimism of shoppers and Sainsbury talked the optimism down. We have become accustomed to taking a lead from across the Atlantic and it appears that retailers who get the "value for money" proposition right can make some money.

From the US we now have the concept of the smart shopper who will not spend, spend, spend on credit cards but will save up for major items. This shopper looks at price and value and quality, says Mike Duke, chief executive of Wal-Mart. One outcome is that US shoppers are using cash more and credit cards less, which is a big reversal of shopping trends if it continues. Thinking about price and value and quality, most shoppers build an approximate idea of what they are looking for and are quite imprecise at the point of sale. Mr Duke is obviously building up a picture of a shopper hot-wired to Wal-Mart values and paying less attention to his list of attributes. Value, we know, is what is left over when you take away the product (or service) experience from the price paid. If the product over-delivers, that creates value. If it under-delivers that destroys value. Price, we know, is also hard to pin down. Most local shoppers will buy bread and milk but they would struggle to tell you ...

The clever thing about Tesco advertising is that it does not say we are number one or we are the biggest. Instead it tells the shopper that everything we do is for you. Its latest TV ad tells viewers that it is giving double clubcard points if you buy bananas, cheese and so on. The music is homely, perhaps traditional, perhaps something your granny would know. There is no video, just a set of stills like the local ads that run at your cinema. The promise is cleverly weighted so that the viewer is not being asked to come in-store to get something specific, just to expect value. Other executions may promise low prices but not this latest campaign. Local retailers will not be able to afford television campaigns. Even if they could, experts would say that they will get a smaller return. The advertising is about keeping Tesco shoppers loyal, keeping its market share. Your job is to think about the promises and how you can make them to your shoppers. Your tools are your in-store signa...

I read a good post (http://www.newsagencyblog.com.au/2009/08/28/what-do-newsagents-charge-for-faxing.html) asking what price local shops charge for providing a fax service. The blogger had attached a photograph of his sign with his prices on it. What struck me was the message on the sign. "You drop, we fax," it said. "Pressed for time, drop your documents with us and we'll do it for you at no extra charge." That is a message that will persuade most shoppers that you want to give them good value, even if they stay to do the copying or faxing themselves.