Supermarket Price Promises – What Do They Really Mean?

by Paul Simister on April 2, 2013

In the last year we’ve seen various price promises from the leading supermarkets in the UK – Tesco, Asda and Sainsburys and price competition intensifies as national austerity restricts spending.

The idea is simple.

The supermarket agrees to reimburse the buyer for any difference in the price of his or her shopping that would have been achieved at one of the other big supermarkets.

How The Supermarket Price Promise Works And Why It’s Not As Good As You Think

There are various limits in place but let’s take a tin of Heinz baked beans as an example with the following made up prices.

In Asda – 50p

At Sainsburys – 54p

At Tesco – 55p

Asda shoppers don’t need the price promise.

Sainsburys would refund 4p to get back to the Asda price, Tesco would refund 5p.

But I doubt the supermarkets do it on individual line items without offsetting savings where they are the cheapest.

Then we have the issue that about 40% of purchases are made from special offers.

If Branston Baked Beans are on special offer, 4 cans for a £1, in Tesco, the number of customers buying Heinz Baked Beans will drop sharply.

Some have a strong enough product preference to pay the price premium but others don’t.

The Tesco customer buys the Branston baked beans and no longer has an effective price promise.

In fact, if those packs of four cans of Branston beans were available for sale at Sainsbury and Asda for £1.50, there is a favourable price difference of 50p to offset against higher price discrepancies.

Exact Like For Like Purchases Are Not The Best Like For Like Comparison

With so many products on special promotion, the best buy shopping basket from each supermarket will be very different.

A customer can buy the same generic items at all three supermarkets with the price promise and still not qualify for any kind of price refund.

These price promises give you a false sense of reassurance that you’re getting a good deal.

In fact there is much more marketing style than cost saving substance.

It is clever marketing and while it may not be a scam, it is based on tricking customers.

Can The Price Promise Backfire?

I went to Tesco on Saturday and when I paid, I received a Tesco Price Promise receipt that told me I’d saved £0.44 (on a spend of about £50).

Bearing in mind that I bought a number of special promotions including 25% off six bottles of win, to be told that I’d only saved 44p is really quite alarming.

Some of the items I bought must have been much more expensive at Tesco than at the other supermarkets.

{ 2 comments }

Connor Harley May 29, 2013 at 8:10 am

I am fond of comparing prices from different supermarkets and I do notice that some are just really giving out false promises.

TerriLevine September 16, 2013 at 4:15 am

Sometimes prices are made to trick shoppers especially the promos. You can notice the price difference from the 3 supermarkets we’ve compared here. I can notice that too especially when I buy personal things like toothpaste. There is always a $1 or .55 cent short or difference to the other supermarket. But I would rather prefer buying from a supermarket that offers lesser price value on my toothpaste than from the other one that promises a per cent off. 🙂

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