The money would be better spent on staff training and incentives to show employees that their contributions and ideas are valued.
Egremont director Sue Grist said: 'Customer service is about more than wide smiles for the mystery shopper. Every member of the team needs to feel that they own responsibility for standards in the store and needs to know that excellent customer service will be rewarded.
'Considering that UK supermarkets spend£500,000 to£1 million a year on mystery shoppers, yet at the same time are aiming to cut costs, it is surprising that all retailers don't just draw a red line through the expense of mystery shoppers.'
According to Grist, mystery shoppers are kept in business because they give managers the illusion of being in control, when in reality the answer to problems in stores is to pass control to their staff.
'Retailers need to invest in embedding a passion for customers in their staff - not in arbitrary tests with results that are unlikely to be a catalyst for change,' she said.