Johannesburg - The major supermarket groups would all have us believe that they’re offering the lowest prices, each one offering much-hyped, loss-leading bargains every week in order to tempt us into their stores.
Checkers has its “Inflation Fund” which, it claims, saved its shoppers R1 billion last year, and even Woolworths, traditionally the preserve of “less price-sensitive” shoppers, is investing its profit in lowering prices on an increasingly wide range of brands in order dispel the notion that it’s for the occasional spoil rather than everyday shopping.
But as for which supermarket chain consistently offers the lowest prices across the board, that’s mostly a matter of perception, based on aggressive advertising claims. I think it’s safe to say the Shoprite group has won the perception war, positioning its Shoprite and Checkers stores as being cheaper than competitors Pick n Pay, Spar and Woolworths.
Interestingly, both Shoprite and Pick n Pay have in recent years lodged competitor complaints with the Advertising Standards Authority of South Africa, objecting to the other’s broad claims of having the lowest prices, and in each case the complaints were upheld.
The advertising spat between the giants hit its peak in late 2010, prompting me to comment in this column: “What do we consumers learn from all of this? That neither of these two competitors can prove their prices, overall, are always lowest. And that neither is likely to stop trying to make us think it’s the one winning the price war.”
Now Pick n Pay has thrown down the gauntlet to its competitors with a programme that is essentially saying to consumers: “Don’t bother with the exhausting business of shopping around and chasing specials – if you could have got it cheaper elsewhere, we’ll refund you.”
The retailer launched Brand Watch on Sunday.
This is how it works: once a week a team of undercover price sleuths goes into the stores of four of its competitors, countrywide, armed with a list of a thousand top-selling branded grocery products, their mission being to note the shelf prices.
The prices – from two stores of each competitor, in four regions – will then be fed into Pick n Pay’s computerised till system.
When a customer buys at least 10 different products, if at least one of them is on that “1 000 products” list, it will trigger an instant price comparison at the till.
If the total of the Brand Match products would have cost less elsewhere, the customer will instantly receive, not cash in hand, but a cash-off coupon with that amount for their next shop – at a Pick n Pay store, of course.
R50 is the maximum voucher amount which will be issued per transaction. If Pick n Pay Brand Match prices were lower, the till slip will reveal how much the customer saved.
How will you know which 1 000 products are on the Brand Match list? You won’t – the list was drawn up not by Pick n Pay but by independent market research company Nielsen, and it’s not being disclosed in order to prevent price manipulation, or as Pick n Pay chief executive Richard Brasher put it, in a conversation with Consumer Watch, “people would try to be clever”.
“We’re essentially saying to consumers that they don’t have to compare prices; we’ll do it for them,” Brasher said.
Well, on the chosen items, at least. That 1 000-product list apparently accounts for 50 percent of all grocery sales.
So in a sense, it’s half the story of how the grocery giants actually compare in terms of prices.
“Our prices are very competitive on a day-to-day basis,” Bracher said. “We can’t predict our competitors’ specials, but we can make sure that our customer gets the benefit of that saving, at our tills.”
He wouldn’t be drawn on which supermarkets’ prices would be assessed for Brand Watch, but it’s clear they are Checkers, Shoprite, Spar and Woolworths.
The price checking – in 32 of those stores, countrywide – will happen weekly.
Real-time matches would have been ideal, but that’s logistically impossible, given the legwork involved in the absence of online price disclosure in the case of all the stores being Brand Matched.
“We spent more than six months developing Brand Match,” Brasher said. “We wanted it to be as simple and powerful as possible for customers. We’re putting ourselves under tremendous pressure as a team, but that’s good.”
* Wendy Knowler is Independent Newspapers' consumer editor. Her column Consumer Watch is published twice a week in The Star, Pretoria News, Cape Times and Daily News. Email her at [email protected].