Wednesday, May 22, 2024

Discounts appear as shoppers seek pre-Christmas value

Must read

With Christmas just days away, and a busy week of shopping ahead, some large retailers have begun to offer discounted prices on items essential for most people’s Christmas dinner.

Lidl and Aldi are advertising small turkeys for €8.99. Vegetables are also dropping in price, brussels sprouts are now available for just 49c across a range of supermarket chains.

On the face of it, it is good news for savvy shoppers, but the use of loss leader products by large supermarkets is also about selling more, according to Deirdre O’Loughlin, Professor of Marketing at the Jim Kemmy Business School in the University of Limerick.

“Competition in general is great for everybody because it gives consumers choice, it allows them to shop around, particularly in the run up to Christmas where there is a lot more spending than normal.

“Ultimately if you are a consumer going into a supermarket and you see something that is very good value, at a loss essentially, that means you may end up essentially spending more overall in that supermarket.”

Professor O’Loughlin also points out that loss leader prices from supermarkets can also affect the producers of those products, if they have to take lower prices for their products.

She points that in Ireland there is a ban on below cost selling for products like cigarettes and alcohol, but not food.

“This is an ethical issue. Ultimately it means those producers are under pressure to produce, often when they are the weaker stakeholders in the market. They don’t have power over their terms of trade, yet they are under pressure to comply…with the larger more powerful retailers.”

CSO figures show grocery price inflation here is continuing to slow, at just above 6% last month

In Limerick city today the streets were busy, but not overwhelmingly so.

A few shops have already got sale signs in their windows, but others seem to be holding off another while.

Shoppers who spoke to RTÉ News in the Parkway Shopping Centre were divided over whether value for money, or just getting all the Christmas shopping out of the way, is most important thing.

One man pushing a full trolley said it was “definitely value for money and getting in and getting out as fast as you can”.

Another older man said “its just about getting it done really” although he adds “with an eye on the value too”.

Another lady said it is value for money. “People are on tight budgets and they are only buying what they need now in food and don’t want to be wasting money, rushing around picking up things that go out of date and that they never use.”

Most recent inflation figures for food show grocery price inflation here is continuing to slow, at just above 6% last month, according to the CSO.

The most recent figures from Kantar show grocery price inflation fell to 8.6% in the 12 weeks to 26 November – the seventh month in a row that there has been a drop in grocery inflation and the lowest level since August 2022.

The market analytics company said it expects the grocery spend in Ireland this December will exceed €1.4 billion, a new record for the country.

In response to queries from RTÉ News this evening, several retailers said their suppliers do not bear the costs of seasonal discounts.

A spokesperson for Lidl said via a statement: “We’re acutely aware that the cost-of-living crisis this year has posed significant challenges for our customers and our suppliers. Lidl absorbs the cost of all seasonal and everyday promotions in order to safeguard local suppliers.”

An Aldi spokesperson said their suppliers are not impacted by “the continued value provided to customers this Christmas”.

Latest article