Categories
News

Price War Wages on: Why Milk Is Cheaper Than Bottled Water in the UK

British supermarkets have not been living up to their superlative.

The “Big Four” supermarket chains in the UK (Tesco, Walmart’s ASDA, Sainsbury’s, and Morrisons) are your standard, labyrinthian grocery stores that have faced some competition from the German discount chains Aldi and Lidl over the past couple of decades. Aldi and Lidl offer a no-frills shopping experience where many products are own-brand, similar to Costco and its Kirkland brand, which is enticing customers away from the native chains.

The Big Four have been desperately combating the increasing market share of Aldi and Lidl as post-recession consumers eschew store loyalty for lower prices.

Data from Kantar Worldpanel

While it seems like Aldi and Lidl are barely in the running, their steady growth has contributed to declining sales at the Big Four, which tend to respond to quarterly setbacks with competitive pricing. Throughout 2014, however, the ebb and flow of price wars between the companies escalated from reliable streams of competition to a raging storm in uncharted waters of murky legality.

For most of 2014, milk was cheaper than bottled water in the UK, dipping to 43 pence sterling (65 cents USD) per liter over the holiday season, according to price collation from Brand View. While the published data has been largely reported with an asterisk due to its sole coverage of multi-packs of own-brand milk, it’s these promotional brands’ prices that are trying to draw customers away from Aldi and Lidl.

Why cry over insanely cheap, spilled milk? Because the Big Four collectively committed hundreds of millions of pounds sterling to price cutting thousands of products in 2014 and there’s no end in sight for the spending spree.

Supermarket price wars tend to fall into the realm of competitive pricing, but this long-term battle in the UK is crossing into predatory pricing, malicious price-cutting with the intent of destroying a business. The Competition and Markets Authority (CMA) in the UK is meant to protect consumers from predatory pricing, but, similarly to Federal Trade Commission policies in the US, this offense is extremely difficult to prove and enforce.

The Big Four collectively committed hundreds of millions of pounds sterling to price cutting thousands of products in 2014.

The Big Four, or one company in particular, would have to successfully annihilate another company’s market share in order for the CMA to step in. All the current price wars are accomplishing is increased hybrid consumerism, resulting in lower overall sales for the Big Four.

Basically, they’re destroying themselves.

Privately owned companies Aldi and Lidl don’t have to answer to investors which allows them to focus on bringing discounts to customers (and occasionally infuriating unions). Their business models lend themselves kindly to this type of deal-oriented consumer spending, so their profits have increased even though they haven’t engaged in this price warfare.

Waitrose, a high-end UK grocer that lies somewhere between a Gelson’s and a Whole Foods, and independent convenience stores alike, have also been gobbling up market share due to the shopping cart diversity consumers are seeking.

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Tesco seems to be the first of the Big Four realizing the days of unwavering customer allegiance and one-stop shopping are long gone. As Britain’s leading grocer, Tesco has felt the waves of this paradigm shift the harshest, especially on top of their failed Fresh and Easy venture in the US and a 263 million pounds sterling (nearly $400 million USD) accounting scandal that would make Mel Brooks’ head spin. A slew of different cost-cutting methods, including closing unprofitable stores and moving to less expensive headquarters, were announced at the start of the year in an attempt to instill faith in investors and the public.

The days of unwavering customer allegiance and one-stop shopping are long gone.

Of course, their accounting scandal isn’t disappearing as fast as their profit margins, and with good reason. Profits were overstated in an official report directly reflecting Tesco taking fee payments from suppliers earlier and paying them later than they should have.

Because, you know, who needs happy, stable suppliers?

Begbies Traynor, a firm specializing in corporate restructuring, revealed in a recent report that all of the Big Four have been manhandling suppliers and extending payment terms. The firm also found a 92 percent increase in British food and beverage manufacturers in “significant distress” in the past year and that more than 100 of these suppliers will likely go under by the end of 2015.

“Worryingly, with 3.6 million people employed in the UK food supply chain, the economic and political risks associated with the current price war are now reaching boiling point ahead of May’s election.” -Julie Palmer, partner at Begbies Traynor

With most of Aldi’s and Lidl’s inventory consisting of imported goods, their success was not shared with British suppliers nor has the recently appointed grocery code adjudicator, Christine Tacon, proven to be useful during the price war. The Department for Environment, Food and Rural Affairs (Defra), which Tacon reports to, simply points fingers at the CMA.

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For our US readers, you’re probably feeling pretty lucky to be an American right now, right? Well, here’s a direct quote from the FTC’s official government website:

“Although the FTC examines claims of predatory pricing carefully, courts, including the Supreme Court, have been skeptical of such claims.”

Relax. Even with Lidl expanding to the US, this black hole of predatory pricing is unlikely to cross the pond with it. The sheer size of the US and the density of the grocery market have already done a decent job of keeping Walmart at bay. And with smaller chains like Publix maintaining strongholds on certain regions, more diversity will certainly be welcomed.

Sorry, Brits. Your government is still a never-ending roll of red tape.

Main picthx The Independent

Categories
Humor

This is the Hilariously Ridiculous Story of Shane, the Wal-Mart Deli Guy

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This is the tale of Shane, a Walmart deli counter employee.

Shane also has a special, calculated knack for driving his bosses crazy during the work day. It’s a surprise he’s not fired, but he’s continuously being scolded for doing things such as offering customers extended warranties on the fried chicken and cheekily labeling certain deli products as “stoner approved.”

Shane’s story is told through a series of pictures snapped by his co-worker, Reddit user Ardentleprechaun. The documented pictures expose Walmart back-room whiteboard, where -Management has to repeatedly scold Shane through written warnings.

As with any story with minimal documentation (Ardentleprechaun’s pictures are currently floating at the top of Reddit.com), we’re going to  assume, for the sake of storytelling, that Shane is a real person, and that these notes from –Management are real as well. Shane, if you’re reading this, I hope you keep walking the line of playful customer interaction and staying employed by Walmart.

Thanks for the laughs:

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Via ardentleprechaun

Categories
Hit-Or-Miss

McDonald’s Sued for Forcing Fee-Charging Payroll Card on Employees

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A former employee at a Pennsylvania McDonald’s is suing the fast food franchise for requiring her to receive her wages through a payroll debit card that charged fees.

In a model that had been used by several major franchises in the U.S., including Taco Bell, Wendy’s and Wal-Mart, workers had become frustrated by the fees that charged the workers to withdraw their cash from the card, receive a paper statement, have their card replaced, or for 90 days of inactivity.

Natalie Gunshannon said McDonald’s refused to let her deposit directly into her checking account.

An employee at a Milwaukee McDonald’s told CNBC that he spent up to $50 a month on fees relating to his JP Morgan Chase payroll card.

AP reported that in New York, the Attorney General’s office is investigating companies using these cards as it sent letters to Wendy’s Co., Costco Wholesale Corp., Dollar Tree Inc., Chipotle Mexican Grill Inc., Home Depot, Inc., Darden Restaurants Inc. and Wal-Mart Stores Inc., requesting them to send documents related to the payroll card system used by each company.

Some companies that offer the card, offer it as a an option and not a requirement, but workers have said they were automatically enrolled into it, or if they wanted to opt out, they would have to deal with a pile of paperwork.

The McDonald’s where Gunshannon worked has since said it will provide more payment options for its employees, but Gunshannon is hoping to have her case certified as a class action lawsuit on behalf of herself and the employees who also had their wages distributed through the payroll card.

H/T Eater, ABC News + PicThx Eileen Norman

Categories
Hit-Or-Miss

Walmart Display Claims Soda is ‘Wholesome. Healthy. Delicious.’

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Listen, we’ve all given Walmart a bad rap and hey, maybe this was just an honest mistake. At least, we hope it was, because the last time we checked soda was no where near “Wholesome” or “Healthy.” Although, we’ll agree that the fizzy stuff is rather “Delicious.”

Kudos to Consumerist reader Kathy for snapping the pic featuring seemingly misplaced 2-liter bottles of Sprite and Coca-Cola. We’re guessing the signs claiming to be  “Wholesome. Healthy. Delicious.” and “Easy convenient meals” were meant for something like fresh sandwiches and salads. Then again . . . it is Walmart we’re talking about and that McDonald’s in the background isn’t really helping its case. Just sayin’.

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Sigh. The day that Sprite or Coca-Cola become replacements for a nice pre-packaged chicken from the store deli, I’ll just head over to the bakery for some yesterday, today, tomorrow expiring glazed donuts.

H/T Consumerist

Categories
Humor

Walmart Donuts Good [In]Definitely, Maybe

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So, it turns out college students are not the only social group to use the “Yeah, it’s probably fine” method of ignoring expiration dates. Wal-Mart is also pretty boss at eye-balling it, and getting paid for it.

As evidenced by the tree tags on this box of glazed donuts (one price, three dates), these solid rings of stale sugar were good today, yesterday, tomorrow, and probably the day after. You know, if you just use the pattern to extrapolate. The pale white fuzz there? Don’t be silly, that’s extra glaze. Donuts, like wine, only get better with age.

It’s not like you can blame Wal-Mart. Dates are hard, especially this close to summer vacation (Wal-Mart does those, right?) Do you know what day it is? Quick, right now, off the top of your head. No fair using the computer or phone you’re already on.

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I mean, c’mon. This is ‘the Bakery’ we’re talking about. Baked with pride. And military grade preservatives. But mostly pride. That’s the pride you’re tasting. Not the mold.

H/T + PicThx Consumerist

Categories
Hit-Or-Miss

Seattle’s Best Reveals New Coffee-Bar-Within-A-Walmart Concept

After the bankruptcy and subsequent closure of Borders bookstores across the nation, Seattle’s Best Coffee faced the loss hundreds of points of distribution. Where the Starbucks-owned brand lost a reported 225 locations in the Borders bankruptcy, they keep pushing forward, revealing a new store-within-a-store concept in four Canadian Walmart stores.

Despite the Border’s fallout Seattle’s Best announced that their coffee was now available at more than 50,000 locations earlier this month. This is a staggering number, and seems to be serving as a more approachable coffee experience than the stereotypical “yuppie” demographic captured by its Starbucks father.

Following similar strategies Starbucks employed for its own brand, Seattle’s Best has continuously focused on the addition of new distribution channels. Notably, the brand currently has strong distribution ties with the likes of Alaska Airlines, Delta Airlines, SubwayBurger King, and now Walmart.

While the scope of the partnership is a mere 4 locations deep, the partnership is rather interesting and poses a huge opportunity for the growing coffee brand. The Walmart version of their stores range in size from 400-square feet. to 1,000-square feet, with walk-up windows and seating at the bar.

What do y’all think? Does Seattle’s Best Coffee sound like a good fit for Walmart stores?