Opinions divided on NCA price survey strategy
The Musgrave Group has welcomed the latest NCA price survey, which it says shows Supervalu prices have been "significantly reduced" over the last six months.
15 August 2009
The NCA made headlines twice last month, with the publishing of its final biannual grocery price survey and the announcement that it wants retailers to contribute to a price comparison website. The watchdog said it would not be conducting another survey due to funding problems.
The price review showed that the gap between the cheapest and dearest supermarkets is widening. It said that, excluding Tesco’s ‘non-Change For Good’ (non-CFG) stores, the gap between cheapest and dearest multiples on branded goods is now a difference of 4%, the widest ever seen. However, the NCA also revealed that Tesco’s non-CFG stores were dearest for branded goods, leaving a 6.8% differential between it and the cheapest, Dunnes Stores.
When comparing Supervalu and the multiples there was only 0.6% difference between the three cheapest, Tesco ‘Change for Good,’ Dunnes Stores, and Supervalu Ardee (operating ‘Sterling Match’). The NCA pointed out however, that the Supervalu surveyed in Dublin was substantially dearer. Last year it named ‘Supervalu Wicklow’ as dearest overall in two surveys.
Responding to the NCA’s announcement, Musgrave said it welcomed the report which “confirms that Supervalu has significantly reduced its prices over the last six months.” Supervalu managing director Donal Horgan said the group’s strategy continues to centre on a combination of long-term price cuts coupled with promotional and special offers, including deals such as half price striploin steak or chicken with free vegetables, €7 family dinners, and big brands for €1 and €2.
The NCA’s grocery price survey does not take account of promotions or value offers however, readjusting prices where such activity has been applied. Contrary to the NCA’s view that consumers want more everyday low prices, groups such as Supervalu claim that consumers are looking for more special offers.
Following the price survey announcement, the NCA proposed that retailers contribute to and regularly updated real-time online price database for consumers. Tesco has publicly backed the idea. Supervalu has extended a cautious welcome, expressing concern over how such a site would be operated and monitored.