Many of yesterday's certainties vanish in the face of the deep cut promotion. The latest headline-hitting venture being the 50p effort from Morrisons.
Back around the time that Safeway was sold off to Morrisons there was much muttering about the two models of business - 'hi-lo' pricing and EDLP, with Safeway being the brand leader in hi-lo pricing. What this led to was a lower overall basket and reduced loyalty as it appealed to the brand switchers. But they did get higher footfall.
What have we today? The reappearance of hi-lo pricing in a completely new and hideous guise. The very "lo" prices make no pretence at all of having any relation at all to cost price. On the other hand, at least according to The Grocer, retailers are holding back margin in the way they are in general passing on their input prices. So the gap in the eyes of the shopper will be higher than ever.
And what is the result? According to Verdict research, unprecedented levels of disloyalty. Up to a fifth of shoppers want to shop elsewhere.
Who is doing well? At the moment those companies who know their niche, and continue to satisfy it: Waitrose and Booths; upmarket and local; and the Co-op, a company that knows the small store format inside out.
Bad news will continue to stack up for the majors while they chase short-term and poorly communicated soundbites.
Colin Harper is MD at Storecheck Marketing
Has the number of customer complaints about the price of goods increased recently?
