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Who really is the cheapest supermarket? Don’t expect the NCA to tell you!

Splashed across the Aldi website at the moment is the headline “Ireland’s Best Value Discounter”, while available on many of the Lidl special offer pages is a banner that advertises that discounter as “Ireland’s Cheapest Supermarket”.

And both are basing their claims on the July 2009 National Consumer Agency grocery survey.

One could initially say that this further highlights the uselessness of the NCA grocery surveys in that both chains are able to make broadly similar claims (on the face of it) based on the outcome of the same survey.

It also highlights how ridiculous the NCA were to not include these chains in their grocery surveys from the very beginning – it wasn’t until ValueIreland.com carried out the NCA survey in both Aldi and Lidl that both stores were included back in 2008/2007.

But who is cheapest?

Well, the title of “Ireland’s Best Value Discounter” does actually go to Aldi, when comparing Aldi and Lidl only, and only when comparing “own brand results” rather than “branded results”.
But that’s when comparing a basket of 52 items “own brand” items purchased in both stores – all other stores (Tesco, Dunnes, Superquinn etc) are not part of this particular survey (table 2).

The title claimed by Lidl as “Ireland’s Cheapest Supermarket” is sort of incorrect as it only refers to that the part of the survey where “own brand” items are purchased rather than any “branded”. It should really read “Ireland’s Cheapest Supermarket for Own Brand Items”

Technically, it should really read, “Ireland’s Cheapest Supermarket for Own Brand Items in a basked of 19 items, rather than 52”.

With me still?

If you buy 20 listed “own brand” items in Lidl, they are cheaper than all other stores. However, if you buy a basket of 52 “own brand” items in Aldi, they’re cheaper than all other stores – including Lidl.

So that probably means that the “Ireland’s Best Value Discounter” claim made by Aldi is also incorrect – since if you bought 20 items instead of 52, then Lidl would be cheaper.

Confused – you should be, and that’s exactly what supermarkets want – confused consumers. This is why the National Consumer Agency also had to give up on their plans for their “grocery price comparison” website (which I’ll be coming back to soon).

Its unfortunate then that in a grocery market where the chains depend on consumer confusion, the organisation that is supposed to help consumers by reducing that confusion are only serving to increase it with their useless grocery surveys.

Edit 22/03 – Since I originally drafted this article, Conor Popes Pricewatch column in The Irish Times has touched on this topic, Lack of price information costing consumers a packet. In his article, he refers to the NCA grocery price surveys, and the fact that it seems like we thankfully won’t see any more of them:

Speaking at a recent media briefing to promote the amalgamation of the Financial Regulator’s information and education functions within the NCA, the agency’s chief executive Ann Fitzgerald confirmed that the general surveys had been knocked on the head. She expressed disappointment that they were being abandoned but said that obstacles being put in the way of the agency by retailers had made them next to impossible to carry out.

Edit 23/03 – Following on from the Pricewatch article above, CheapEats.ie have followed up also with their article, Pricewatch: The cheapest supermarket?.

Check out their discussion in answer to the question – In the absence of in-depth price comparisons, which supermarkets do you find the cheapest?

6 comments On Who really is the cheapest supermarket? Don’t expect the NCA to tell you!

  • I received an e-mail here in follow up to the post above from this morning.

    The ValueIreland reader was asking what the situation was with regards to “advertising standards” when it came to the claims on the websites of Aldi and Lidl.

    Whatever about the rights and wrongs of the claims made above, “advertising standards” guidelines don’t apply to what companies say on their own website.

    If the claims were published in newspapers or on radio or television adverts, then the claims could be further examined for accuracy, but basically you can say what you like on your own website.

  • I would like to point out a few facts about the NCA. They are a government body and therefore will do whatever it takes to deflect the blame form the government to anyone that is a easy target. Hence the campaign to put the blame on the retailer for high prices in Ireland. Unfortunately this has backfired on the government with the huge influx of goods being sourced from the Uk as a result of retailers seeking better value. Irish suppliers have had to reduce staff levels due to Tesco no longer doing business with Irish suppliers and Dunnes Stores now sourcing a larger volume of goods directly from the UK. This has put Irish suppliers on the back foot and searching for ways to reduce costs in order to compete with UK prices. Not an easy feat when you take the higher cost base in Ireland compared with the UK. I will list some of the cost differences between Ireland and the UK which the NCA will never admit.
    Electricity and Telecommunications>35% higher in Ireland
    Minimum wage>30% higher in Ireland
    Rent & rates>65% higher in Ireland
    Additional licence fees> Vary from €500 to €5,000 in Ireland. Not applicable in the UK
    Employer PRSI (Employment tax paid by the employer on top of gross salary) Up to 10.75%. Not applicable in the UK or elsewhere in Europe

    These are a few reasons as to why prices are higher in Ireland than the UK. Therefore if the cost base between Ireland and the UK were the same as was the margins achieved by retailers. Retail prices in Ireland would be significantly better than the UK.

  • Perhaps the inverse should be examined……who’s the most expensive on a list of 20 common branded items?

  • I agree with John in Bray. To compare the most expensive stores for branded products would be a very good idea. However it is worthwhile noting Tesco, Dunnes, Super Valu, Costcutter, Eurospar and Superquinn are all the same price for the main items such as Cornflakes etc. You will also notice each supermarket will run the same promotions at different times during the year and usually one will start in a different supermarket when it has finished in the previous one. My recent price surveys show very little difference between any of the supermarkets regardless of size. I can honestly say it is no longer worthwhile travelling from one store to another to get better value. I do think it is worhtwhile travelling to a store that offers the best and most personal customer service. These are the real stalwarts of Irish business and are usually small independent supermarkets that appreciate your custom.

  • I would like to direct my comments to Leon McNamara. You make a claim that Tesco are the cheapest in Ireland. I can only presume you have shopped in every independent supermarket in Ireland and compared their prices with that of Tesco and Dunnes. I say Dunnes due to the fact both Tesco and Dunnes match each others prices outside of promotions. I am afraid you are very mistaken with regard to Tesco pricing. Tesco are now pushing prices back up as they are under pressure from their shareholders to recover the lost profits from the spate of reductions last year. I constantly do price checks in all the multiples, symbol groups and the main Independent supermarkets throughout the midlands and can assure you the Independents appear to give better overall value. Tesco appeared to be most expensive supermarket according to my last price check which took place on the 21st of July 2010. The best value could be found in a Independent supermarket in Laois. I found Tesco prices have increased by as much as 18% overall during the last four weeks. However I have noticed they are now running fewer but better promotions. It appears they are trying to get the consumer to buy into the promotions and get their money back by charging much higher prices on the non promotional lines. It will n ot take long for Dunnes to follow suit. In general I feel my research has proven you no longer have to travel outside of your own town if you wish to find better value. Shop local and you will get the benefit of real savings which you will see over the course of the year.

  • I would just to add one further comment. Has anyone noticed how none of the bigger supermarket chains now claim to be the cheapest. Obviously because they can no longer to keep cutting prices. Probably because they have hit rock bottom and are running the risk of making massive losses and letting off staff.

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