Are you swayed by supermarket psychology?

They have been moved to aisle 17, top shelf. Two for the price of three this week.

Thanks wavechange, I hope they’ve been ethically sourced, see:

http://www.youtube.com/watch?v=jgRlzFIgm1E

They’re easy to find – the sign on the aisle is for Tetryon and Phased polaron cannons. All on the middle shelf.

There’s a Tesco at Bangor which is so large they issue maps and compasses with the trolleys. Interestingly it also has very, very wide aisles – which has often made me wonder whether they got the measurements wrong, and simply don’t have enough stuff to fill the store.

Ian, I know that one and like to visit it when I can.

On one visit, the staff in their cafe did a wonderful job of looking after us, when we arrived cold, tired, hungry and too stoopid to fend for ourselves, worn out after a busy day’s tourism on Anglesea.

An App was demonstrated on TV the other evening. You put your shopping list on your phone and, if the supermarket participates, the app takes you to all your chosen products by the quickest route. Trialled against someone without the app they arrived at the checkout at the same time. The app won then simply because it had recorded all the purchases and prices and payment at the till was therefore instant.

Since many stores give the means to record purchases and pay quickly this seemed a bit of a damp squib.

If supermarket psychology is designed to make you buy more than you planned I wonder if the app will be modified to take you past stuff they’d like you to buy?

Derek mentions ease of access and car parking. A new Aldi opened a few miles away and it is very well stocked, but the exit is very close to a busy roundabout and if you visit late in the afternoon it’s very difficult to get out of the car park. I have seen similar problems at other supermarkets and wonder how much thought was put in when planning supermarkets.

I don’t fancy using an app to guide me round a supermarket. That sounds like the ultimate tracker and I already know where the cookies are.

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I’m certainly not happy about the merger, Duncan, though that’s mainly because I don’t think it’s a good idea for any company to have a major share of the market. My comments here were because of the benefits to a company of running stores catering for different customers.

I don’t know what is happening in the Sainsburys/Asda but what you say does not surprise me.

Sainsbury’s are paying Walmart nearly £3 billion in order to amalgamate with Asda. Walmart will have a 42% stake in the new corporation. Sainsbury’s will remain in control and Sainsbury’s Holborn head office will be the new HQ. The chairman, chief executive officer, and chief financial officer will all be Sainsbury’s people. So it is not an American take-over.

It all depends on regulatory approval. There is already over-capacity in the grocery sector and most superstores are under-trading; many are also in the wrong place for changing customer habits in consequence of the growth of Aldi and Lidl. It is almost certain, therefore, that there will be some rationalisation of stores, especially where their territories overlap, in addition to any transfers to other supermarket operators like Morrisons or Waitrose enforced by the competition authorities.

The opportunities for outright disposal are limited, however, because most supermarkets are stand-alone premises that do not lend themselves easily or economically to conversion to other forms of retail. Councils would be concerned about the loss of other types of store from the high street so there would be resistance to such moves. For the same reason there would be opposition to M&S taking over redundant supermarkets and refitting them for general merchandise with a food hall [and this might lead to an overprovision of car parking making the site uneconomical]. It would be unlikely that Tesco would be allowed to pick any up unless they gave something up in return. The superstores do not fit the Aldi and Lidl business model and are probably also a step too far for The Cooperative. Booths or other regional operators might be interested in some of the mid-size supermarkets but Sainsbury’s will wish to keep the prime locations. Tesco having already entered into a trading alliance with the French hypermarket group Carrefour takes one other potential bidder for surplus stores out of the frame. This integration could very difficult during the present trading climate and could take a long time.

The prospects for staff must be worrying but mainly in terms of redundancies rather than harmonising the conditions of service where a ‘no detriment’ policy for existing staff would possibly be negotiated. Over time though, pay and conditions would progressively respond to the local labour market which with one fewer big employer would be sure to harden.

Eventually the Morrisons & Safeway merger settled down – after some initial arrogance by Morrisons towards Safeway’s brand, products and personnel – but things are tougher now and the fall-out for consumers could be very serious. There will be an impact on the supply chain and although Sainsbury’s say their larger size and economies of scale will bring down prices, the reduction in competition will have a countervailing effect. This is a bold move by Sainsbury’s to engulf and devour Asda – but will it be just that bit too big and ultimately indigestible?

“he UK’s competition watchdog has launched an investigation into the proposed Sainsbury’s-Asda merger. The Competition and Markets Authority (CMA) will look into whether the deal will mean less consumer choice, higher prices or worse service.

Sainsbury’s and Asda – which has been owned by US retail giant Walmart since 1999 – are the second and third largest supermarkets in the UK.
Under the terms of the deal, Walmart would retain 42% of the combined business.”

It seems that Sainsburys’, with a 58% stake, has not been “taken over by the Americans”. The biggest shareholder in Sainsburys, with a 22% holding, is Qatar Holdings LLC.

It will be interesting to see what the CMA decides. As regards market share, we’ve lived with a dominant player for many years – Tesco – who have 28% of the market. We didn’t seem to complain too much about that. Not very different from the 31.9% that Sainsbury’s/Asda will have if the merger is approved.

Going back to my original comment, is it worth companies having separate stores aimed at different sectors of the market? Would it make sense to have these near each other or to keep them well apart?

When we go to the US and rent a villa for the duration, Walmart is the first place we go ……. to buy a kettle.

Then we go to a supermarket. Walmart doesn’t have the greatest choice of food.

Pretty ropey, in fact, IME.

Walmart is rather stack em high, stack em cheap, so perhaps Sainsbury’s will turn Asda stores into something similar as competition for Lidl and Aldi.

It’s interesting to look at the market share of our supermarkets. Drag the slider at the bottom to see how the market share has changed in the past few years: https://www.kantarworldpanel.com/en/grocery-market-share/great-britain/

“separate stores aimed at different sectors of the market?“. There is very detailed data that shows consumer wealth/type related to post code. This is used by supermarkets to decide whether an area is suitable for them, what size and type of stores would be appropriate, and what type of products they should sell.

Here in sunny Gloucester, Sainsbury’s, Tesco, Morrisons and Asda are all represented by 1 or more large stores each. The most recent of those is the large Morrisons store in the “triangle” (the recently redeveloped space inside the railway junction).

The Sainsbury’s stores have recently been updated to include mini Argos branches. These can be used to “click and collect” a wider range of stuff than can be displayed on even a hypermarket floor.

Of the smaller supermarkets, Co-op, Aldi, Lidl, Iceland, Farmfoods and M&S are also all present, with a new Aldi nearing completion close to my house. About the only player not represented is Waitrose – one has to go to Cheltenham (or further afield) for one of those.

As Lidl showed when they recently completely demolished their store nearest to me, it is easy to re-purpose an existing supermarket site. (Lidl had acquired the old fire-station next door, so they replaced their old store with a bigger one.)

If the merger of Sainbury’s and Asda goes ahead, it should help with economies of scale that will help them to compete in an increasingly competitive market. I’m sure both Sainsbury’s and Asda each have some unique characteristics that would be best retained in any merger. For example, I currently find that Sainsbury’s has the best range of organic produce.