There’s a lot of jockeying for position among the supermarkets amid the cost of living crisis. The most eye-catching move this week was by Iceland, promoting fresh produce lines for just 1p. That’s a lower price than when Iceland launched 52 years ago. (A kilo, of onions, for example, was 12.6p in 1970.) What’s not to like?
But there’s a catch. In fact, there are several: first: it’s a promotion lasting just four days. Second: you can only select one fresh produce item at this price. And third: it’s only available for online shoppers, on whom Iceland is bizarrely focusing its value message. Whether this constitutes a genuine attempt to help shoppers tackle the cost of living crisis (following last week’s move to lower the minimum basket cost from £40 to £35); to stimulate online sales amid declining usage of its online fleet; or simply to drum up publicity on social media, I’ll let you decide.
Also making a splash was Marks & Spencer, which this week announced price cuts on 60 basics. To be lowering prices in this inflationary environment is indeed ‘Remarksable’ but it contrasted marksedly with Iceland’s initiative in two important ways: first, it’s exclusively available for store-based shoppers and that feels right to me (even if it presents problems for its jv partner Ocado) as shoppers believe (often correctly) that the best value is to be found in shops. Indeed, the consultancy Store Trials has noted shopper migration from online to store from cost-concerned shoppers not just because of the country opening up but in a flight to value, with smaller pack sizes, lower price points and, of course, opportunities for reductions at the end of the day’s trading.
The other crucial difference, however, is a sense of permanence to the M&S price cuts. Nothing lasts forever, of course. The retailer that makes a price promise will always be a hostage to fortune, whether that’s on free deliveries (see below) or price matches. But it’s not about what you do for four days that counts. It’s what you do on the other 361. As Tesco has shown (p4, p12), it takes a concerted effort, across the range, across the year, to win credibility and the trust of shoppers.
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