Magazine article Marketing

Helen Dickinson on Retail: Retailers in Dock over Price of a Pint

Magazine article Marketing

Helen Dickinson on Retail: Retailers in Dock over Price of a Pint

Article excerpt

A lot has been said over the past few years about Britons' thirst for alcohol. We are described as a nation of binge drinkers; something that is supposedly turning our urban nightlife districts into no-go areas for respectable citizens.

One man's high spirits is another man's drunken depravity, but whichever side of the argument you favour, there is no escaping the fact that as a nation, we are among the biggest consumers of alcohol. More importantly, the booze we buy is getting cheaper.

Which is why it was interesting to see the cheap alcohol debate taken one step further in the past couple of weeks - by a brewer.

Scottish & Newcastle broke ranks with the rest of the brewing industry to voice its concern over irresponsible drinking habits being fuelled by supermarkets intent on selling alcohol as cheaply as possible.

At first glance, this seems to have come from the most unexpected quarters. However, it is important to bear in mind that drinks manufacturers have been making a concerted effort to promote responsible drinking campaigns as part of their own corporate social responsibility activities.

Having taken steps down the responsible drinking route, it may have irked them to see retailers selling their products at rock-bottom prices solely in an effort - as the manufacturers see it - to drive footfall, and undoing their good work in the process.

The retailers' counter-argument is that they are simply providing the public with what they want - and at prices which represent value for money. It is a fair point.

However, selling bananas cheaper than your rivals is one thing; alcohol is quite another. I doubt anyone has ever flown into an antisocial rage or vomited on the pavement as a result of eating too many bananas.

Which is why I wonder whether the retailers will now face the same dilemma that the drinks manufacturers did a few years ago. How much pressure needs to build before they consider raising prices to make customers think twice about buying alcohol, or before they get more involved in the responsible drinking campaign?

The pricing issue is unlikely to go away any time soon. During the World Cup, pounds 22 could buy you as much as three cases of lager. That meant alcohol was cheaper - on a per unit basis - than water.

Those prices could now pre-determine the cost of alcohol at Christmas time, and thus the downward price spiral continues. The retailers are effectively playing chicken with each other over who is prepared to take their prices lower. …

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