Kathy Foley

March 2nd, 2008

Thirty-five cents won’t buy you much these days. A few loose envelopes maybe, but not the price of posting them. An extra few minutes parking, but not the minimum amount for the meter. If you dropped 35c, would you bother to pick it up?

A measly 35c was the difference in price between Dunnes and Tesco for trolleys filled by the National Consumer Agency (NCA) with an identical selection of 61 branded products. Better value might beat them all, but not by very much, it turns out. In Superquinn the trolley of goods cost €1.91 more than in Dunnes, an insignificant difference on a bill of almost €190.

Despite the abolition of the Groceries Order and the constant stream of flyers inserted into newspapers and wedged through our letterboxes promising special deals and unprecedented value from various supermarkets, there is almost no variation in pricing between the leading chains. Funny how the words “price-fixing” and “cartel” spring to mind.

The NCA also visited Supervalu stores, convenience shops, discount supermarkets, and independent butchers and greengrocers. Supervalu was marginally more expensive than Dunnes and Tesco and slightly less so than Superquinn. Ann Fitzgerald, the chief executive of the NCA , welcomed the emergence of Supervalu as a “real competitor” to the multiples, although charging more or less the same for groceries as the others doesn’t seem especially competitive.

Eurospar stores were a little more expensive again and Spar and Centra shops were the priciest of all. Aldi and Lidl were markedly cheaper, with Lidl providing by far the best value, 17% cheaper than Aldi and as much as 56% cheaper than the leading supermarkets. Small independent shops had the most varied pricing, with some cheaper than the supermarkets and some more expensive.

Grocery buyers could have foretold the results of the survey. Although some shoppers may have been surprised to realise that Supervalu and Superquinn were effectively no more expensive than Dunnes and Tesco, the NCA research merely served to underline a few universal truths: only millionaires do their weekly shop in Spar or Centra; Aldi and Lidl are cheap; we should all Shop Around.

We know all of this and yet we don’t seem to care. According to the economist David McWilliams, just 35% of Irish consumers buy own-brand goods, compared with half of British consumers. And while Aldi and Lidl have managed to garner 10-15% of the Irish grocery market between them, most customers still seem reluctant to switch.

In the battle to change our mindsets, Fitzgerald is leading from the front, or in a way, from behind. She disclosed last week that she buys her loo roll from Aldi and Lidl. “We would not buy there unless it was good quality,” she said, with the clear implication that if it was good enough for the Fitzgerald bottoms, it should be good enough for ours.

Snobbery evidently influences our fondness for branded goods, but that preference stems partly from familiarity. We were reared on Irish teabags, so we regard foreign teabags as likely to be of dubious quality. Nationalistic sentiment also plays a part in our shopping decisions. When you grew up under a constant bombardment of Buy Irish advertisements, it’s hard not to feel guilty reaching for the 10c-cheaper foreign-made ketchup.

Fitzgerald wants us to change what we buy and how we shop. “Our strong advice to consumers,” she said, “is to split their shopping basket if possible and to seek value in the range of shops available to them.”

Consumers could trawl through the 31 tables of exhaustive price comparisons in the NCA survey and cross-reference with their own shopping list to figure out the cheapest possible weekly bill, but that would be complex.

Putting the findings into practice would require maps, route planners, calculators and the relinquishing of full-time employment by at least one member of the household, who would have to travel to five different supermarkets, a butcher’s and a greengrocer’s every week. All for a saving of €50 or €60 at most.

As most consumers just aren’t that price-conscious, it would be better to frame the supermarkets debate differently. Despite a high level of planning objections, the multiples open new stores every month, to the continued detriment of the independent retail sector, which struggles to compete on convenience although the NCA survey showed it can compete on price. We’ll miss those family-owned neighbourhood shops when they’re gone.

We should also consider the extent to which we are happy being taken for chumps by the multiples. Last year, for example, the Competition Authority pointed out that, although the prices of items previously covered under the Groceries Order had fallen as expected, other goods had risen in price to compensate for the resulting dent in supermarket profits. “This is more than just coincidence,” the authority said at the time.

Soon the Competition Authority will release its first comprehensive report on the Irish grocery sector. It is expected to be critical in part, but won’t contain formal recommendations. So, after a bit of hand-wringing, the big supermarkets will be allowed to continue as before. As long as they face no sanctions from the body supposed to clamp down on cartels, and we all continue to shop there in droves, why would they do any differently?