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The Truth About Supermarket Price Wars

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Eamonn Walsh | 12:22 UK time, Monday, 5 December 2011

With their price drops, rollbacks and brand matches - as well as that old firm favourite, the two-for-one offer - Britain's leading supermarkets are doing battle for customers' cash. They claim their price war is good news for shoppers in these tough times, but are their money-saving offers all they seem?

Sophie Raworth takes her trolley round the aisles of Britain's biggest supermarket chains and reveals some nasty surprises at the checkout.

We welcome your views on this week's programme. Please follow us on Twitter @BBCPanorama or use this forum to give your thoughts on The Truth About Supermarket Price Wars.

Comments

  • Comment number 1.

    On 1pm news supermarkets say they 'publish unit prices' to help us compare. eg. Cost per 100g for example.
    However this is not quite true. You will get some as cost per Kg, some cost per 100g of similar items. Simple for me to work out maybe - but certainly not as helpful as it could be. Why have two different units ?
    Similarly if you have buy one - get one half price - they do not give you the cost per Kg of the 1+1/2 ...which makes it difficult to compare with the 3 for 10 pounds or 4 for 12 pounds offers. Far, Far more difficult to work out in your head.
    Could be so much clearer if they GENUINELY wanted transparancy.

  • Comment number 2.

    Tesco had something interesting recently on the price of chicken
    Week one, Fresh Chicken Mini Fillets were £1.85
    Week two, the same product was £2.15
    Week three, suddenly the product is in the 'Price-Drop' and back to £1.85.
    How do you explain that?

  • Comment number 3.

    You should try working for the supermarkets!! Some of the pricing things I have seen include a £50 kids toy reduced to £3.50 one week then back upto £50 and other products marked at buy 3 for £15 and selling individually for £5 then price increased up to 9.50 each!! Its a complete joke!

  • Comment number 4.

    Good stuff BBC, excellent report. It is pretty well known that buying loose works out cheaper than packs but my local Tesco has a dodge for that. If they have loads of packs left they simply don't re-stock the loose. It's probably 'illegal' but I have opened packs in the past and put a few in a loose bag. That is if you can find a bag to put your loose in: another little dodge they use.

  • Comment number 5.

    What a load of tosh. This is the sort of pathetic drivel I expect to see on Watchdog, not a supposedly hard-hitting investigative program. If people cannot do a simple bit of mental arithmetic to work out whether one product is cheaper than another then maybe they should resort to taking a calculator with them to the supermarket. How on earth is advertising products as 2 for £2 right next to the same product advertised as £1 each misleading? What a total non-issue, but I suppose I shouldn't have expected anything else given the presenter.

  • Comment number 6.

    Tesco's 'Lite Tortilla Wraps'. - I was so mad about this products reduction in visual size and premium rise, I rang Tesco of course on their 'premium' phone rate and placed a complaint. Given I use Internet Shopping, I am always able to check my previous orders. On average I used to buy at least 2 packets a week. Not only had the Wraps gone up in price, they were CLEARLY small in size. Smaller packaging and smaller product.

  • Comment number 7.

    I've logged a complaint with asda recently as after logging into my online account I selected an offer after seeing an ad banner, the screen was blank so i rung customer services to be told that the offer wasnt available to the store that delivers to me. On checking the said store is one of the largest ones in my county and after making the trip myself oh they do sell the item i wanted.....but luckily there was an argos nearby and it was 20 quid cheaper there.

    Also on a recent toy purchase, when it arrived it had a stock room sticker on the side that showed the rrp of the toy (which was £9 cheaper that what they sell it at) their purchase price and profit margin which was over 50%!......and then after looking into it their asda direct site the item was cheaper there compared to the grocery part (and direct items are couriered)

  • Comment number 8.

    Tonight's episode was very weak.

    Food prices have fallen steadily over the last 50 years as distribution and retailing have become more efficient.

    The supermarkets put very clear prices on their products. Customers can choose to buy them, or not.

    If Tesco offers a chicken for sale for 5 pounds then even the dullest person can understand the value proposition. What is the relevance of the price of something last month if you are buying something for lunch?

    Your approach is unhelpful for 2 reasons:

    1) as the world becomes more complicated you are encouraging the concept that individuals don't have to think for themselves

    2) The world is on the edge of financial meltdown; discussing whether Mr Kippling meets Asda's "Wow" criteria is as distracting as it is insulting.

    You need to get out a bit more.

  • Comment number 9.

    Sainsbury's Basic brand cornflakes 45% increase in price. We are all in this together!

  • Comment number 10.

    In tonights Panorama programme there was a comparison made between Fair Trade prepacked bananas and loose ones, with the loose ones being cheaper in price. Fair Trade bananas are more expensive because the growers are given a fair price for their product and therefore feel this comparison was not fair. The whole concept of Fair Trade products is to allow the producer to be given a fair price for their product and to give them a reasonable standard of living. Something which many of us take for granted.

  • Comment number 11.

    Good program but you missed one or two of the supermarket tricks.

    1. It goes like this, 3 for 2 Ben & Jerry's icecream but what they don't say is one flavour is excluded. In this case the standard price was something like 4.99 a tub for the flavours included but one flavour was 4.98. The sign just said includes all 4.99 tubs.

    2. Buy 2 get 3 free. Most people would read that as 3 for price of 2 but what you have to do is buy 5, then you just pay for 2. Pick up just 3 and you pay for 3.

    3. Tubs of Chocolates, 4.99 or 2 for 8.00. But the deal only includes Roses and Heroes and on the same pallet is a stack of Celebrations and there is no price label for them. Pick the wrong 2 and you pay 9.98 not 8.00.

    It is such a pain shopping these days with the supermarkets just out to trick you it seems.

  • Comment number 12.

    I was lucky enough to go to school when arithmetic and mental arithmetic were taught as two separate lessons, so here are my 5 simple rules to make sure you don't get fleeced;
    1. Don't be stupid
    2. Allow more time, to assimilate label information
    3. Don't be stupid
    4. Do the math
    5. Don't be stupid
    This does not mean that you won't get run over in the car park, but hey-ho, at least you'll have some money left.......

  • Comment number 13.

    Excellent programe even if some of the tricks we do all know. NO BODY mentioned the co op who pass back profits to their shoppers by way of the good old DIVI card. We do all have to stay one step ahead of the tricks they play on us. I wonder if the actors who do the voice overs for Tesco now regreat being part of the trick to convince us of the genuiun bargins they have on offer and now KIND TO us they are with their prices ... thinking of us.. yeah right... IF you all think the bankers are crooks then lets look at how the directors and owners of the big supermarkets live !!!!!!!! and what they get paid.. and thier bonuses.. NOW THAT WOULD BE A GOOD STORY ........

  • Comment number 14.

    Well done Panorama and Sophie Raworth for exposing the charade of so called price cuts by supermarkets. Just one example of my disgust with Tesco is as follows: For many months I have been buying a ready meal from the light choices range for £1. Then, just a week after Tesco introduced its so called "Price Drop", I found that my meal had now gone up to £1.25, but you could get three for £3. In other words, customers now had to buy three at a time just to get the same price as before (no 'Price Drop' there!), and anyone buying a quantity other than a multiple of three now pays MORE! So as far as Tesco is concerned, "Price Drop" in marketing speak actually means "Price INCREASE"

  • Comment number 15.

    Quite tame program. Supermarkets also take psychological approach such as "matching prices"; and ASDAs current 10% less is a perfect example. All attempt to persuad one through misinterpretation that "I mush be getting my shopping cheapest here otherwise they wouldnt make the offer". Wrong. Few people take the time to check, so charging more and refunding the odd one that someone does check leaves them still with a hefty profit. ASDAs offer takes it one stage further with the misdirection. It is the overall bill that is guarranteed to be less, not each individual item. Some in that shop can be extortionately higher than elsewhere but the overall can be lower. Also 50% of a price that I set in the first place is hardly a good deal e.g. 5 pound item. I say its 10 then put it down to 7 claiming a reduction. Finally price increases bear no relation to increases in costs. Cooking oil has shot up despite its cost going down to the retailer. All these tricks are not only used is supermarkets bet all over the retail sector. Where did ethics go. To mind they just lie through their teeth. Sad thing is you see young people coming into business with the same lack of ethics (e.g. Young apprentice program).
    A reasonable profit sure; but happily rip people off - no.

  • Comment number 16.

    just been to my local tesco.. there is yellow tickets saying 99p for one tin £4 for three tins on heinz baked beans sausages macaroni ravioli and other pasta foods

  • Comment number 17.

    If you work in retail you know about all these tactics stores use, it isn't just the big 4 that use them.

    People just need to stop being stupid and look more carefully at the prices. If people did that, then the tactics wouldn't work and they would stop being used.

    All the information regarding the offers are on the labels. Read them. The number of times I have people asking me dumb questions regarding offers, when it is written on the SEL is unbelieveable.

  • Comment number 18.

    This edition of Panorama was weak, lacked substance and was low on factual information. Panorama had an agenda, which they set out to justify. You say that profits at Supermarkets have not been affected by these offers, none of the recent price comparison offers have been running for a full financial year. You talk about prices going up but ignored the fact that food commodity, agricultural feed prices and fuel prices have all been rising which contribute to the rising prices in supermarkets. You say nothing about what all supermarkets do every day to comply with trading law. Finally, you treat customers like they are complete idiots, with no grasp of basic arithmetic or any concept of marketing strategy. Where is the BBC's impartiality and balance? The 'Truth' about Supermarket Price Wars? I don't think so.

  • Comment number 19.

    Just had an example of questionable practices from Tesco today - this was my experience:

    1) Tesco Finest Smoked Salmon was priced at £4 each or 3 for £10 or 4 for £12. Enticed by this offer, I took 4. When I went to pay at the (infuriating) self-service checkout, the price of each packet came up as £3.50 (hence the offer is not as good as it first appears) and, more importantly, the special offer was not applied when I finished the transaction. I pressed the button for assistance and a member of staff came over to help but he could not apply the special offer himself, and advised me to queue at Customer Services for them to apply the offer, which was just too much hassle.

    The offer advertised by Tesco was misleading. Also, why not authorise staff to apply the advertised special offers at the checkout rather than making customers queue up again at customer services?

    2) Tesco has suddenly increased the price of Cow & Gate follow-on Milk from £7.55 last week to £7.99 this week. Probably trying to fund another price drop by squeezing customers on essential items! Or maybe they'll put it down to £7.55 again next week and claim they've dropped the price. Dodgy or what?

  • Comment number 20.

    I'm not a regular Panorama viewer, but if this is the regular standard of programme then I'm not going to become one. Pretty much the entire content of the hour long programme was included in the website article which took a few minutes to read - the rest of the programme was just waffle and she didn't give the supermarkets much of a chance to respond.

    Not all the offers were as scandalous as made out anyway:
    * "bigger pack, better value", "Where are the scales?", "price establishing", "Buy Now! Buy Then?" - agreed, these are a bit of a con.
    * "Multi-buy non-deal": These are often on mix-and-match at various price points, so while 3 £1 sachets of salsa for £4 might not be a great deal, £1 salsa + £1.50 fajitas + £2.50 sauce for £4 would offer a saving.
    * "The 'Wow' Factor?": OK, so 15 offers are not offers. But 15 out of how many? If there are only 20 offers then it might be time to trading standards, but if it's 15 out of thousands then I'm willing to give them a bit of leeway for human error.

    I've got two of my own pet peeves for supermarket offers:
    * Confusing mix and match - i.e. putting similar items with similar offers on the shelves next to each other, but not applying the offer if you combine them in the wrong way.
    * Price establishment in wine - the big brands will often have several similar wines, but one is always on offer and the others are only in the shop to be next month's special offer.

  • Comment number 21.

    This was one of the weakest BBC panorama programs I have seen over years containing inaccuracies and a misunderstanding of how the Supermarket industry operates. Having spent 49 years in the business myself in a variety of junior and senior roles, I was looking forward to an intelligent deeply researched piece of programming but what we got was a flipant, almost juvenile attempt to have a go at the Supermarket industry which centred around a dozen or so pricing errors and to imply that we are all being ripped off by the four major companies.

    With the vast nature of the supply chain, the complexities of the I.T. systems within the central management areas, head offices,and retail networks, a product inventory of up to 45,000 lines and the propensity of human beings to make mistakes, some pricing errors and incorrect point of sale material are innevitable. Show me an industry that makes no errors!!

    Most of the so called 'illegal' pricing examples did not stand up at all; the Tesco chicken deal was a typical sample of nonsense reporting. As we all know, food prices have moved up significantly during 2011 and Tesco had moved this price from £4 to £5 for a number of months and it was therefore totally ligitimate for them to describe this as a price drop to £4 in their recent campaign. Would Panorama prefer them to have left the price at £5?

    There is fierce competition within the UK Supermarket industry which has enabled us all to benefit significantly from overall food pricing over recent years and I am quite clear that we would all be paying much more for our food and many other household and non food items if these business had not been so successful.

    Two final points.

    No attempt was made during the program to interview a senior representative from any of the major companies and thereby give them the opportunity to challenge the Panorama findings, why not?

    These UK supermarket businesses are highly efficient, superbly run companies where performance is under constant review and costs are tightly controlled at all levels. I would suggest that if our various governments over the years had operated as effectively as these businesses we would all not now be in the current financial mess.

    Piano Peter

  • Comment number 22.

    Rather a weak programme, looking for trouble and dark conspiracy where there is very little. Most shoppers I know are quite capable of working out the cheapest option. Good Luck to the supermarkets if they can persuade folk to buy things they don't need, don't want or are too expensive.

    Why did Sophie trot out the corny old "I'm a busy mother I don't have time to look at prices" line? Most mothers are nowhere so stupid as that. Some mothers even take the opportunity to involve their children in the buying process.

    I felt there is more wrong with our education system than with the supermarkets; we should encourage children to use simple concepts like price, cost, quantity and value. It is not difficult arithmetic.

  • Comment number 23.

    I have long been aware of the problems with supermarket pricing, and always try to check not only specials, but all prices and also dates of sale etc. This morning I was in my local Morrisons. Cathedral City mature cheddar was on sale at £1.99 for a 350g pack. I bought 2 packs for £3.98. However I could have bought the two in a special double pack at the special price of £6.39.

    In the past I have had a run-in with Tesco over a weighing machine at one of their tills. I noted that it did not return to zero after use. They would not accept this even though it was obvious until I threatened to report them to Trading Standards.

    I have always tried to take time to check prices, but it should not be the responsibility of the shopper. We should be able to trust the accuracy of what we see on the ticket, particularly as many products are not individually priced. Sometimes products are not actually priced on the shelves or the shelf price has been overridden by the till computers so the shopper is charged a higher price at the till. This may not be noticed until the shopper checks the receipt at home or more probably never.

    Maybe supermarket shopping should be a family affair where someone can keep an eye on prices both in the basket filling and at the till.

  • Comment number 24.

    I went into Tesco on Sunday 11th Dec, already aware that many prices were higher than before the 'price cuts'. A net of oranges was advertised as 1/2 price -£1-25. underneath it said 25p each. There were 4 oranges in every net. I asked a girl stacking fruit which oranges were on special offer. She took the net to the till and returned telling me it was these ones. I demanded to see a manager - there wasnt one on site. I was told to go to customer services (where there was a long queue) and I asked the staff to bring one of them to me. I explained in due course to whomever arrived, that the pricing was misleading and illegal (and surely these small oranges werent £2-50 to start with)! She apologised and removed the notice. I asked if I could have a manager call me next day, and that if my voicemail was on, to leave a number I could call back on. As I walked to the till, there was another huge display of these oranges with same ticket.
    Next day, no calls in the morning. A missed call from 'unknown' about 2pm but no message left. I had to collect something from Tesco that evening - didnt have time to engage in more complaints - but to my horror, the same oranges were STILL advertised at the same price with the same ticket.
    Do they care? Clearly not. Trouble is, I dont know how to complain to the right body that could slap a fine on them and publicise these tricks. Complaining to Tesco is hopeless. I still havent had a call from them.
    Clearly they have laughed in the face of that exposure on Panorama - which I found great and exactly what most people experience but cant do much about.
    Regarding the comment from the Chielf Exec on Radio 5 live the next day, about their reduced profits - he said that they could explain the profit reduction as a result of pricecuts - but their 'through put' had increased indicating that sales were up.
    What nonsense. They have NOT cut prices, their through-put increase is because of sales (again on Sunday) of things like Muller Rice 6 packs - "buy one, get two free".
    They really think we are stupid!!
    More exposure please!

 

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