The Price is Not Right

The Irish Entrepreneur
Nicole Buckler, March 2004 edition

Tired of excessively high prices? Well, the onus is now on the shopper to help get those prices down! Nicole Buckler investigates.

It is now a well known fact that Irish consumers are paying way too much for what we are purchasing. Buy why is this? Many punters will argue that competition has not been allowed to flourish effectively here, and to some extent, that plays a factor. But let’s pretend for a minute that competition in Ireland is effective enough and that as a general rule, it works to keep prices in check. This would work on the premise that if we all shopped around in many places, and consistently bought the cheapest item, that competitors would also reduce their prices to stay in the game. But this is not the case at all., simply because Irish people are not shopping around” What is it about our attitudes towards shopping that we don’t do this? This is very much contributing to prices staying manically high. We aren’t forcing retailers and service providers to compete on a price basis. Are we lazy? Are we rushed? Are we drunk? What’s going on?

Says Dave Wall of RipOffIreland.Org, “Prices are high because of peoples reluctance to shop around. I no longer buy certain items on the high street and use the internet when possible. If people were more aware of the savings to be made from shopping around then competition would actually work. For example, in Blanchardstown Shopping Centre, there are many shops selling Playstation games, two of which are across from each other and one is more expensive than the other. If people stopped buying games from the more expensive store then they would be forced into reducing their prices. But, Irish people seem afraid of shopping around.”

This desire on our part as consumers to buy the first thing we see prompted the Director of Consumer Affairs, Carmel Foley, to launch a campaign to increase price awareness last November. Said Foley, “The main message of the campaign is that ‘Price Awareness Pays’. We want to remind consumers that they can save money by comparing prices and by having a greater regard to price when choosing goods and services. As consumers we do have choices and we can make a real difference by taking a pro-active approach. Surveys consistently show a spread of prices. We want to encourage consumers to question how much they pay for everyday goods and services, then to question whether or not they are getting value for their money”.

Even the Tanaiste and Minister for Enterprise, Trade and Employment, Mary Harney, has been banging on about shopping around. She said that consumers have a role to play in ensuring effective competition by shopping around and seeking the best value for the products or services which they require.

Lecturer in Entrepreneurship at DIT, Dr Tom Cooney, says that there is merit to the argument that Irish people are reluctant to shop around and simply buy the first thing that they see. “This certainly has been true in recent years with people having higher disposable incomes, but less time. People believe that it is easy to save time by picking up the first item that fits their need, since if it doesn’t suit, they can always buy something else tomorrow when they have more time. This would not have happened before the mid-nineties when money was less plentiful. It could also be argued that people behave in this way because they are lazy and they do not go to the trouble of spending time planning their purchase and looking at alternative options. Another argument regarding this behaviour is that it is much more likely to be found in men who are generally considered to be functional shoppers. However, I do not believe that Irish people are much different from other nationalities of similar wealth, but we are merely following the global trend towards convenience and instant gratification. Because Irish people are less willing to shop around they have to pay more for the product/service. Your are not in a position to bargain or search for alternatives if you need it now. We justify this expense by believing the marketing spiel that there is a perfect correlation between price and quality, and that ‘you get what you pay for’. But this practice is also driven by personal insecurity, as with increased wealth some people have developed a need to display it by purchasing expensive branded products when better, but less visible, options are frequently available. Again, this behaviour is not peculiar to Ireland.”

TIPS FOR SHOPPING AROUND

According to Diarmuid MacShane of Value Ireland (www.valueireland.com), here are a couple of suggestions about how we can shop even smarter in order to save our hard earned money, and beat the rip off prices.

WHY AREN’T IRISH PEOPLE SHOPPING AROUND?

The Irish Entrepreneur speaks to Diarmuid MacShane of www.valueireland.com.

Convenience, and inertia – There may be a case for saying that people will always just stick with what their used to – their local shop, petrol station, pub or supermarket. They’ve gone their for years, and why would they change now. Most likely they know the owners, or their parents used to, and you can’t really complain about prices to people that you know. “Sure, aren’t they only trying to make a living as well”.

Goods being purchased – I think I can speak for guys particularly here when I say that once you find something that works and you know it, and like it, either with regards to food, clothing, beer, toiletry products etc, you’re more likely to just keep on buying it because it makes shopping easier, and faster. For example, listening to the radio recently, a DJ said that he had 7 pairs of the same jeans, 5 blue pairs and 2 black pairs. Saves him trying on anything else – no comment about price at all. Similarly, having worked in the States on several occasions, there was always a case for making sure I stocked up on Lynx deodorant etc prior to leaving, both for myself and for mates over there – better ship over a dozen flammable containers than try out a deodorant you don’t know.

Shopping “snobbery” – I think this is becoming particularly relevant here in Ireland at the moment, though probably on a more subtle level than I experienced while living in the UK. For example, people may only ever feel “comfortable” seen shopping in Superquinn, or Tesco, and definitely wouldn’t be seen shopping in Aldi or Lidl. In the UK, it was the difference between shopping in Waitrose or Safeway. That said, it’s also the case that the location of a particular outlet of a supermarket will determine whether people would be seen shopping there also. There are some good examples in Dublin.

“Impulse Purchases” – I’m coming to the conclusion that this is a major aspect of shopping where consumers are getting ripped off, and retailers can, in a sense, see us coming. All consumers have two options when out shopping – in particular for non-food items. Firstly, buy something right now and rip the packaging off on the way home in the car and trying something out as soon as you get home. Or secondly, check out the price in the shop you see an item. Maybe check out a couple of other shops, or similar items elsewhere. Then come home, check out alternatives on the web, maybe read up on the item in a couple of magazines, decide on the best model for money you’re willing to purchase, and then go out (or log on) and buy the item you want. I think you’ll find that the majority of people will just go for what they see first time their out.

Something that we did raise here would be a kind of “inferiority complex” on the part of Irish consumers. Maybe not the best way to put it, but an explaination.
For many many years, Irish people didn’t have the affluence they have to
day. They had little money, and had little scope on non-discretionary items. The necessities were all that could be purchased, and the luxuries (whatever they may be), could only be looked at longingly. For the current working generation (20’s & 30’s), this would have been the weekly experience when out shopping with the mother.

Now, however, with so much money around, there could be seen to be an attitude of “I have the money now, and I’ll spend it on whatever damn stuff I want – wasn’t I deprived when I was growing up, and now that I have the money, I’ll look after myself”.

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