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Shoppers face little chance in the ‘confusopoly’ of the supermarket world

Is this why supermarkets offering fewer, cheaper products do well? 1000 Words /

Does anyone really know the proper price of anything in supermarkets anymore? We can do price comparisons, and say “this is cheaper in Tesco than in Sainsbury’s,” but then Lidl and Aldi come along and prove that much lower prices could have been offered all along.

And then there’s the hundreds of offers on display – signs for “special offers”, multi-buy deals, price discounts. Supermarkets must be great fans of Oscar Wilde, who famously wrote: “A cynic is a man who knows the price of everything, and the value of nothing.” And this must be the suspicion of shoppers who continuously face the supermarkets’ pricing tricks.

These plethora of deals and just how legitimate they are is the subject of a super-complaint against the grocery sector, being launched by the consumer group Which?. They have collected a dossier of “dodgy multi-buys, shrinking products and baffling sales offers”. This evidence, collected over the last seven years, has now been sent to the Competition and Markets Authority (CMA).

Which? contends that as much as 40% of all groceries sold in supermarkets in the UK are presented as a promotion. Among the examples they cite are a “special value” sweetcorn six pack, when a smaller pack was proportionately cheaper. Other accusations include Asda raising the price of an individual product to make a multi-buy offer look more attractive.

Do the math. Danny Nicholson/flickr, CC BY-ND

Perhaps one of the worst tactics that consumers face is when supermarkets don’t show clear price comparisons – in other words how much different prices equate on a per kilo basis. You really do need to take a calculator with you when you shop but how many time-pressed consumers searching for good value will do that?

Not the first time

This is not the first exposé of its kind. Clearly, in a market where groceries and toiletries total around £115 billion, there is serious competition for shoppers’ money. Four years ago, Sophie Raworth presented a BBC Panorama investigation which examined just how good value supermarket promotions really were. She found that many were actually poor value for the consumer.

For example in a Tesco store a 1.5kg tub of “Big Value” Vanish stain remover cost £12. Raworth compared it with three 500g pots in the same supermarket which cost just £3 each or £9 for the same amount. But it wasn’t only Tesco – her examples covered all the major supermarkets across most grocery and household products.

A year before this report, the Office of Fair Trading warned retailers to stop using misleading pricing practices, or face “enforcement action”. It seems, however, we are still a long way from seeing less complicated pricing on the shelves.

The CMA will have to show that the supermarket’s behaviour has been both systemic and detrimental to consumers. Retailers argue that, while errors have been made in some calculations and marketing, price promotions are a good thing for consumers.

Whatever the result of the legal action, what is perhaps most important here is that Which? has alerted the consumer to the fact that they may not be getting a good deal. This in turn goes to the heart of how we shop and choose.

Every little helps? Mark Sheffield/flickr, CC BY-NC-SA

The paradox of choice

Many researchers have highlighted that the more variety there is in price and content, the more confusion and discomfort we may feel. Psychologist Barry Schwartz has termed this the paradox of choice. Most of the time people make decisions that are “good enough”, but not necessarily the best, because human beings are constrained by the complexity of the environment they are in and their own cognitive limitations.

Other research shows that consumers find too many choices actually demotivating – excessive choice can paralyse them into not being able to decide what to buy and reduce the satisfaction they get when they make a choice. Is it any wonder then that supermarkets in some cases use the illusion of better value through the multiplicity of choice which they know consumers will not be able to cope with? The term confusopoly has even be coined to describe how companies selling similar products intentionally confuse customers instead of competing on price.

Research supports this. There are studies that show how consumers are more likely to choose and buy goods when there are fewer choices available. Perhaps findings such as this tell us something as to why more consumers are switching to the discount stores like Aldi and Lidl who in general have less goods on offer and fewer promotions.

If Which? don’t succeed in their action, perhaps consumers will at least be more aware of how they are being influenced by major supermarkets. While they may not be found guilty, surely it is time for retailers to present all offers on a like-for-like basis with a clear indication of the price per kilo on competing offers.

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