Supermarkets are using fresh produce price fluctuations strategically to incentivise increasingly disloyal shoppers, despite a background of rising costs and prices of other core items.
Online grocery shopping comparison website mySupermarket.co.uk carried out a survey of the cost of 24 basic fresh produce and other food items, comparing prices on July 9 in both 2007 and 2008. It found that while prices overall have increased by more than 25 per cent, within fresh produce the picture was much more mixed. Tomato prices, for example, remained unchanged, while iceberg lettuce in Tesco was 23 per cent cheaper than a year ago, yet 15 per cent dearer than a year ago at both Sainsbury’s and Asda.
mySupermarket director Johnny Stern said: “Our staples basket is put together in a very independent way and relates purely to online sales. What is happening on fresh produce is more a function of supermarket pricing policy than external market forces, unlike other categories.”
His statistics back this up, with fresh produce rises at Tesco, Sainsbury’s, Asda and Ocado of 5.4 per cent - well below the total 25.7 per cent for the basket of 24 lines.
“Individually, Tesco has shown the largest price increase of 9.4 per cent, with Asda on seven per cent, Sainsbury’s on 4.9 per cent and Ocado on 1.1 per cent. These figures are not based on the 24 staple lines, but on every single fresh produce line where we could find a comparison across all four online retailers.”
The conclusion from mySupermarket is that fresh produce prices are increasing, but less than those of the staple lines in general. “There is still enormous volatility in supermarkets on pricing from month to month and even in individual supermarkets between different lines; there can be variation from one apple line to another, for example, in terms of prices rising or decreasing,” said Stern.
From a consumer point of view this is clearly advantageous, as it shows there are deals to be had, and the challenge is to figure them out. But from a supplier’s point of view, it suggests their own rising costs and wider market forces have little to do with retail pricing policy.
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