The rising price of food and caution at the checkouts has forced the supermarkets to resort to ingenious methods to persuade us to keep spending.
A recent survey found that the price of staple foods such as bread, rice and eggs has risen by 27% over the last 12 months. Sadly, that doesn't even tell the full story, unless anyone out there can make an edible meal from those ingredients alone. As is painfully obvious to most, the vast majority of items on the supermarket shelves have risen in price, some by well over 100% - not just the staples. As a result we are paying, on average, an extra £1,404 per year to feed ourselves.
It's not surprising, then, to see that the discount chains such as Aldi and Lidl are doing rather well as consumers struggle to cope with rising prices. Sales at Aldi rose 19.8% in the 12 weeks to August 10 compared with last year, whilst sales at Lidl were up 12.3%. When you consider that typical households spend around £45 a month at Aldi compared with £126 at Tesco, it's easy to see why.
But the big four supermarkets are fighting back, with promises to cut our shopping bills with lower prices. How, though, is Tesco going to cut prices whilst simultaneously maintaining its huge profit margins - £2.55bn in 2007? Well, with some rather underhand tactics it would seem. Yes, that's right, surprise, surprise, the price cut promises are not all that they seem.
Only this week Tesco got a ticking off from regulators for running 'misleading' TV adverts. The ads implied that Tesco is cheaper than Asda (actually, when you consider the tag line was 'Why pay more at Asda?', they more than just implied it), which turned out to be based on some very specific promotional items, rather than general value for money.
In fact the adverts in question highlight an important element of the big supermarkets' fight back - the promotional item. Let's take milk for an example. Both Asda and Tesco have decided that the best way to help us all cut the cost of shopping for food is to reduce the price of milk - you can get a two pint pot of milk from Asda for 50p. But really, how much difference does that make overall, when everything else is so much more expensive than it was a year ago? Tellingly, the retailers refuse to say whether milk is being used as a loss leader - essentially to pull shoppers in, secure in the knowledge that we'll all spend the same as we always do once we get through the door.
The tactic that really grates with me however is the 'grocery shrinking ray'. This works essentially by keeping the price of, say, a bag of peas the same, but putting fewer peas in the bag. There are plenty of examples of this going on, it's perfectly legal and they don't even have to tell us.
For instance a Cadbury Family Share Bar has shrunk from 250g to 230g, Strongbow packs now contain 15 cans instead of 18 and Pampers Baby Dry nappy packs hold four fewer nappies. For all these items, the price has not changed, which the retailers tell us is to help keep down the cost of groceries. What rubbish - should parents ask their children to go through four less nappies a week, or will they just end up buying them more often? The answer is pretty obvious.
Worse still, you can be sure that when things calm down those chocolate bars and cider packs will grow back to their normal size, but under the guises of a 10% extra free promotion.
So what can we do? Well first of all it pays to look closely at the claims made by supermarkets and remember that, ultimately, they are in it to make as much money as possible. Don't be sucked in by false promises and cultivate an eye for a genuine bargain:
- Look out for loss leaders but remember that, if you are saving on one item, you will still pay more for everything else.
- Remember the ‘grocery shrinking ray’. Where possible, check the price per gram to make sure you are getting as good a deal as you think you are.
- Don’t be distracted by 2 for 1 and BOGOF (Buy one get one free) offers. They are designed to tempt you in to buying stuff you don’t really need.
- Shop around and check out the local Aldi or Lidl. I know they're 'unfashionable', but there are bargains to be had and we could all do with some of those at the moment.
- Equally, look at supermarket 'own brand' products. Often, but not always, they offer good value for money.
Finally, remember that food prices are being driven up by the price of oil. Most affected are things like grains and meat (because livestock is fed on grain) and anything imported. Seasonal vegetables have not been affected as much as everything else, so maybe we should all try going veggie for a while. At least we'd get our five a day…
