Supermarket price wars: Money can’t buy me love...or can it?

 
Craig Wills
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The success of Lidl and Aldi begs the question on the efficacy of brands (Source: Getty Images)
As another CEO falls on his multi-million pound sword this week; the convenient simplification of the problem into pricing and the rampant value-retailer onslaught seems to deliver a somewhat myopic view of the task facing the brooding monoliths that are the big retailers.
While Mr. Clarke was seemingly handed a metaphorical deuce to seven poker hand of a business all those years back; the continual cries of price, price, price seemed to signal a rather naive and simplistic view from the critics – the pursuit of lower prices guaranteeing a Dads dash to the bottom.
Sure, we all want a ‘deal’ and the recessionary backdrop brought [neh brings] with it a rightful pursuit of the best price from all customer segments especially with no barriers to choose, click, buy; but we can’t see this in isolation, nor should we make a presumptive slur against the quality of the core food products that are being served up from the new kids on the block – Lidl reportedly has the most loyal customer base not just due to price but also from delivering over and above customer expectation across a range of criteria.
Price alone is a seriously blunt instrument in the battle for love and loyalty, one very powerful lever but far from the silver bullet; if it were then our much loved Waitrose wouldn’t be reveling in a reported 6% increase in sales and small percentage increase in share.
The holy grail of balancing price, value, quality, service, product and however many additional p’s is what keeps many of us in business.
One observation on the rise of Lidl and Aldi is more worrying than just price; their success begs the question on the efficacy of brands – typically branded products under the guardianship of Unilever, Heinz et al guaranteed a powerful and almost zombie like loyalty – trust, confidence, innovation – week in week out grab mentality. The copycat nature of the German value retailers makes a mockery of the brand; building a powerful business through an almost anti-brand approach - Norpak and ‘You’d Butter Believe It’ being my personal favorites.
It begs the question; what is really happening in the hearts and minds of UK punters and how can the well established British retailers [‘come on Blighty…’] fight back.
Dropping your draws as any mother knows is not the right response, the value is not merely in the price, it’s in the service, the experience, the long-term commitment and ability to provide a range of goods and services that excite and delight. Banking, mobile phones and arguably out of category extensions potentially acted as distractions from the core task of loving, surprising and delighting customers in every way, everyday.
As the song goes ‘Money can’t buy me love, I'll give you all I got to give if you say you'll love me too, I may not have a lot to give but what I got I'll give to you’.

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