Sunday, 27 April 2008

Shopping the Slowdown

A lot of stuff is being written about how to be thrifty now the economy is going tits up.

This week the Office of Fair Trading has raided leading supermarkets to seize evidence of price fixing. Some cynics say this is a government organised smokescreen to cover up the real problem - not price fixing - but runaway inflation. Some estimates put food inflation at 15%.

Buying everything in one large store makes us fair game. Convenience has a cost, but sometimes you'll pay 200% or even 400% more.

This morning I went shopping. I went to Homebase, Wickes and Poundland. Poundland has a new poster in the window. 'Beat Inflation - we've charged the same price since 1990'. Yes, everything in store is still a pound. Among the end of lines and own branded everyday items (tools, stationery, cleaning, electrical accessories) are real savings. You can buy a pack of 2x mains voltage halogen light bulbs for £1.

A pack of 6x mains voltage Halogen bulbs in Homebase Essentials range costs £11.99 (same price at Wickes). Don't be fooled by the Homebase 'budget' style packaging. That's a staggering 4x the Poundland price.

I also wanted some garden compost. At Homebase 2 x 100L bags are on offer for £10. Or 4 x 50L bags are £12. Yes same product, same amount, higher price. OK so the 50L bags are easier to carry and require more packaging. But you could also argue that Homebase also hopes customers can't do their maths and that 4 bags look like a better deal than 2. That's £2 or 20% extra profit thanks.

At Wickes 75L of compost is £3.98 or 4 sacks for £10. That's 300L for the same price as 200L in Homebase - or if you prefer the language used by shops '50% extra free!' But I didn't want 4 sacks, just 2. I hoped I might find another similarly savvy shopper to spilt the special buy 4 offer with. But I didn't have to. A couple of sacks were slightly split. The manager told me he was marking them down to £2.50. 'That's the same equivalent price as buying 4' I pointed out. 'You're right' he said, 'you can have them for £2
each. Now I have 150L of compost (give a tiny bit which is still on the store floor) for £4 - equivalent to an extra 25% discount from the manager.

The real truth is most shoppers can't remember, or be bothered to work out the price of things they buy.

Which is the better deal '3 for 2' or '50% extra free?' **

The supermarkets made sure we couldn't remember the prices years ago - when they introduced barcode scanning. In the 1970's every item on the shelf had a price sticker. I had a Supermarket Saturday job. When prices increased all the tins were taken out the back and we had to peel the stickers off. Today the supermarkets just change the label on the shelf front and update the computerised tills. There was another effect of removing the price labels too - when we used products at home the price was stuck to the packaging. The cost became faniliar, ingrained. When we went shopping again we noticed if the price had increased.

I think one reason I remember prices is not because I am mathematically blessed (I'm not) but because back in 1978 when I operated the checkout at now defunct Key Markets we had to enter every individual price on every sticky label. It became a point of pride among us bored students to try and memorise every price in the store. Somehow it made the dullest of jobs more interesting; it's a game which has saved me thousands and thousands of pounds since the seventies. Its a trick we can all profit from.

** '3 for 2' '50% extra free' - they're the same saving.

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