As in politics, some people are shunning mainstream supermarkets and embracing stores at the opposite ends of the luxury-budget spectrum, says Paul Wilson.
Supermarkets can be divisive things. In a world that can seem increasingly tribal, they can attract their own particular followers whose loyalty is matched by a passionate dislike of the other lot. A friend of mine is consumed by an irrational and remarkably virulent hatred of Sainsbury’s, which I find baffling. Some of us prefer to reserve our antipathy for the biggest player in the sector by far, Tesco.
The high street behemoth made what may turn out to be an error of judgement this week when it started charging customer for bananas by the item, apparently to help pay the rent for city centre outlets.
Customers in its Express stores suddenly found themselves having to stump up 25p per snack instead of between 10p and 15p, depending on the weight.
Retailers would do well to remember that they mess with our ’nanas at their peril. They are a sensitive subject for many, as evidenced by the myth perpetuated by those of a certain bent regarding the European Union’s interference in their shape. It’s worth noting (although it really shouldn’t be) that bananas have never been anything but bendy. And whether we are inside or outside, on top of or underneath, aligned with or diametrically opposed to the EU, they will always possess the same degree of curvature that they have anywhere else.
So Tesco ought to have trod more carefully before tampering with the natural order of things, as ordained by greengrocers since time immemorial.
A company spokesman explained that the firm needs to get more banana bangs for its buck to cover its overheads.
The move was introduced to mitigate against the higher operating costs of its convenience stores in prime city centre locations where leases are more expensive, the company line went, and there are no plans to introduce pay-per-banana in bigger out-of-town outlets.
In fairness to Tesco, Sainsbury’s and Waitrose already charge per banana at convenience stores. But by following suit, the market leader has attracted some unwelcome PR with a move that has a whiff of taking its customers for granted.
Unimpressed and irate punters vented their spleen on social media, as is the way of things these days.
“Every little helps, Tesco? Not when you’re now charging 25p per single banana in our local store instead of by the kilo! You must think we’re stupid!” one shopper fumed.
Another opined: “Why have you stopped charging bananas by weight? The only healthy thing that is practical to eat on-the-go being sold at a premium, yet choc and sweets all massively discounted.”
The retail giant is working hard to recover from a series of setbacks that has led to its profitability and market share shrinking from where it was a decade ago.
It expanded too fast and in 2014 announced it had over-stated its profits, creating a £250 million hole in its accounts.
Despite recent good results and improvements in customer satisfaction, retail experts predict Tesco may never again achieve the level of profitability it managed at the start of this decade when it recorded a profit of £3.8 billion.
If the proposed merger between Sainsbury’s and Walmart-owned Asda is eventually given the all-clear by the competition watchdog, Tesco will be squeezed into second place.
But the overall trend in supermarkets, as in politics, is a migration from the centre ground towards opposite ends of the spectrum.
In much the same way as the old centrist politics of “meh” – when both major UK parties sometimes seemed indistinguishable from each other – from just a few years ago now seems a distant memory, so the “big four” of Tesco, Morrisons, Asda and Sainsbury’s are all losing market share to Aldi and Lidl at one end and the likes of Waitrose, Ocado and Marks & Spencer at the other.
The middle is being well and truly squeezed by the opposites of budget and luxury and there is little sign of that ending any time soon.
A similar pattern can be seen in the energy market, this time with the “Big Six”. Increasingly, customers are moving away from the mainstream by switching to less established suppliers. In a further move towards a readjustment of the market, Ofgem this week proposed a cap for the typical dual fuel customer of £1,136 per year, which will save more than 11 million households – that are not in the habit of switching supplier – a combined £1 billion annually. Industry group Energy UK said the cap will pose a “significant challenge” to many energy companies.
As consumers cast their nets ever further, the tribes of old will start to thin and shoppers will increasingly turn to both sides of the supermarket spectrum. Many consumers now choose to visit Waitrose or M&S for one or two pricier items and a slice of luxury while carrying out the weekly shop at Aldi or Lidl, where they stack ’em high and sell ’em cheap. After all – unless you want to buy your fruit at a premium – you’d be bananas not to.