The UK’s supermarket chains are never less than ultra-competitive, but this year the battle of the grocery giants has gone into overdrive.
Whether watching TV or reading the paper, it’s impossible to escape a promotional blizzard that at times feels like it’s keeping the UK’s commercial media going single-handedly.
There are some key aspects in which the supermarket price battle has evolved this year. Firstly, it’s not just about the big four – this year Co-op/Somerfield, Waitrose and Marks & Spencer have all been drawn into the battle and are tactically shouting about their price credentials. Secondly, the battle has grown to encompass non-food as well as food, with ramifications for the wider market.
What we’ve also seen this week is the ability of the biggest players to pull out a silver bullet. Tesco has found itself on the back foot during much of the year but with double Clubcard points and then this week’s unscheduled mailing to its loyalty members, it has shown how its unparalleled customer insight really comes into its own when it comes to locking in customers in tougher times.
This will put extra pressure on its rivals, and the war of words over loyalty schemes in particular – see the letter from Sainsbury’s Gwyn Burr on p27 – shows just how intense and impassioned the battle for hearts and minds is.
There will be winners and losers, and Tesco’s move this week makes it more likely it is going to be in the former camp. But whoever comes out on top, the price war is good news for customers and the overall consumer mood, because if they’re spending less on the Christmas dinner, there’s more money to go around elsewhere.
Cyber wins still certain
It’s hard to tell if Cyber Monday is more a PR invention than reality, particularly as no one seems to be in agreement on which Monday it actually falls on. Certainly the appalling weather at the start of this week won’t have done online sales any harm.
The exponential rates of growth that online retailing have enjoyed can’t go on forever, and there will come a point when its share of the market does eventually plateau. But that’s a long way off, and with the investments that mainstream retailers have made in their cross-channel propositions, they are beginning to really leverage the power of their brands online.