Big Brother Is Checking You out; Supermarkets Are Being Scanned for Fair Dealing. Women's Editor Ros Dodd Explains Why
Every shopper likes to think they're getting a good deal. They also relish the idea they are valued by the store in which they choose to spend their money.
It's hardly surprising, then, that loyalty card schemes introduced by major supermarket chains have proved so popular.
The way the schemes work is the more money customers spend, the more points they get. The more points they get, the more discounts they're entitled to or the more cash they get back.
Today, 36 million people in Britain possess either Tesco, Safeway or Sainsbury's loyalty cards.
What most shoppers probably don't realise, however, is that the cards are of greater benefit to the supermarket than they are to the "loyal" customers.
"It's a very cheap way of doing market research," explains consumer psychologist Paul Buckley.
The moment someone fills in an application form, the supermarket knows details such as name, address, age and marital status. It builds on the information the form provides by tracking - by way of the card - what customers buy in its stores and when they buy it.
This helps the retailer assess offers that might appeal to shoppers - and in some cases details are sent out to consumers' homes.
This week it was revealed Tesco - Britain's biggest supermarket group - was considering revamping its loyalty card scheme in a bid to make it more alluring to high-spending shoppers.
The chain is looking at creating a three-tiered system that would rank shoppers according to how much they spend. The biggest rewards - such as money-off vouchers or special deals on holidays - would go to families which buy large amounts regularly.
Although being in possession of one of these cards saves shoppers a few pounds here and there (the level of discount is often as little as one per cent), the strong suspicion remains that supermarket customers in Britain are paying through the nose for their food and household products.
According to recent shopping basket surveys, consumers are shelling out up to 40 per cent more for everyday products than their European and American counterparts. Research conducted in stores around the world shows that a selection of basic items such as bread, butter, milk and cheese costs 36 per cent more in this country than in France and 45 per cent more than in America.
Yet gross profits of the major UK multiples remain healthy, with the "big four" - Tesco, Sainsbury's, Asda and Safeway - accumulating sales of pounds 45.55 billion last year.
Consumer groups, Government departments, small business leaders and farmers have all expressed their suspicions that Britain's supermarket chains are not giving shoppers a fair deal.
The arguments may differ slightly but the general point remains the same - the multiple retailers are generating huge profits of about five per cent at the expense of others.
Now the supermarkets are to be referred to the Competition Commission for a profits and competition inquiry. Consumer watchdog the Office of Fair Trading, which has been investigating the pounds 60 billion supermarket industry for the past nine months, said yesterday that while its own probe into profits and competition had proved inconclusive it felt there was a need for further investigation.
The probe will centre on issues including whether a monopoly exists in the sector and will focus on all companies in Britain with ten or more stores or with more than 600 square metres of retail sales space.
Paul Buckley certainly believes UK supermarket shoppers are not getting a fair deal at the moment. …