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Sancho Panza

Local Shops Cut Prices As Middle-Classes Flock To Aldi

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Telegraph 24/10/14

'Butchers, bakers and fishmongers have been forced to reduce their prices for the first time in a decade as shoppers flock to Aldi and Lidl for cheap deals, figures indicate.

A price war between supermarkets over the past year has forced food prices so low that even local shops made reductions, according figures from the Office for National Statistics.

Supermarkets reduced prices by 1.5 per cent on average in 12 months, following a downward trend that started two years ago as the big names offered more cheap deals.

However, not since 2004 had the cost of meat, fish, vegetables and baked goods from small local shops fallen, the ONS said. Average prices were 0.3 per cent lower in such stores compared to a year ago.

The "war" among supermarkets has had a dramatic effect on British shopping habits, with Tesco yesterday reporting a huge 92 per cent fall in pre-tax profits. Its chairman, Sir Richard Broadbent, said he would resign.

Britain's biggest retailer has lost more than one per cent of its market share in the past year, according to Kantar Worldpanel, while Sainsbury's sales fell 3.1pc.

Meanwhile, Aldi and Lidl increased sales by 27 per cent and 18 per cent respectively, as more middle-class shoppers were tempted to look for bargains.

By expanding its fresh food and organic ranges, Aldi is attracting shoppers who would usually visit Tesco, Sainsbury's or Morrisons, analysts said.

But it had also targeted more affluent shoppers by offering "luxury" foods at cheaper prices. For example, from next week it will offer whole, cooked lobsters at £5.99 – around half the price in the big supermarkets – and caviar at £1.49 for a 100g pot.

In general, shoppers spent less last month due to the unseasonably warm weather, the ONS said, with purchases of new winter coats and jumpers delayed.

Clothing and footwear sales were down 7.8 per cent from August, the ONS said, and 4.1 per cent lower compared with September last year.

Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, said: “While the supermarkets are battling it out on price, the real winners are consumers. Extensive price cutting by some supermarkets in a bid to win the price war means that customers are saving on everyday items such as vegetables and milk."'

Aside from the hit to shop owner incomes,one does wonder how much longer local shops can cover the rents that are being asked.

I recently bought some fruit from my local grocer and was surprised by how reasonable it seemed.I actually felt quite sorry for the lady as the council had just handed her a £60 ticket for overstaying her free hour.Summed her problems up really.

Edited by Sancho Panza

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Supermarkets cannot beat greengrocers on price. Never have been able to.

Super market supply chains are too long and have too many unskilled people,

A greengrocer can take wholesale products, stack it and get it shifted.

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Food becoming cheaper we certainly can;t have that as it will eventually impact the land owners rents! I demand the printer is turned up to the highest level and the money showered on landowners, bankers and MP's!

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Well at least the candlestick makers are ok.

It's good to hear that anyone who's anyone is off to the german discounters to buy a very limited range of groceries in a selection of brands no-one has ever heard of. Do you upload a video to Youtube of you doing it and then everyone donates money to charity, or something.

This is a pure high-grade BS media driven narrative. Many whole counties will have barely a single independent bakers or fishmongers within their entire boundary.

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Food becoming cheaper we certainly can;t have that as it will eventually impact the land owners rents! I demand the printer is turned up to the highest level and the money showered on landowners, bankers and MP's!

That knob-end spawn of Clare Rayner, off of The One Show, was telling a parliamentary select committee this week, using his extensive experience of being a child of someone with an existing media profile, that we should be paying more for food.

When you can by a decent spanner for less than the cost of a single serving bag of potato crisps it doesn't tell you crisps are something difficult and complex to make, it tells you, for products made in this country, there are far too many fingers in the skimming pie.

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Well at least the candlestick makers are ok.

This is a pure high-grade BS media driven narrative. Many whole counties will have barely a single independent bakers or fishmongers within their entire boundary.

What do the ONS know? Going by the GDP figures...not very much.

Still,there are plenty of independent butchers,greengrocers and small bakers too.

The point that small retailers are suffering margin compression is supported by the ONS data.

More importantly,in my small world,I'm seeing it in my local shops.

Edited by Sancho Panza

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I don't quite get why people are flocking to aldi. Is it because of competition or deflation ? and are people over stretching themselves?

Because their stuff's half decent, and you don't need to think like a commodities trader just to work out if a tin of beans is good value!

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That knob-end spawn of Clare Rayner, off of The One Show, was telling a parliamentary select committee this week, using his extensive experience of being a child of someone with an existing media profile, that we should be paying more for food.

When you can by a decent spanner for less than the cost of a single serving bag of potato crisps it doesn't tell you crisps are something difficult and complex to make, it tells you, for products made in this country, there are far too many fingers in the skimming pie.

Either you've misunderstood what Jay Rather was saying or the media have spun it in a direction to make him look like a middle class twit.

Jay Rather is supportive of large scale agriculture and supermarkets realising they are the only solution as to how to feed everyone economically and efficiently.

With regards to the price of food what he is saying is that the big supermarkets should have been paying more to the farmers rather than creaming off the margin to pay for store expansion, dividends and executive bonuses.

The unromantic truth: supermarkets arent dying, and thats a good thing

Jay Rayner

The problem is that these businesses are not built for the social responsibilities their massive market power brings. In the aftermath of the horsemeat scandal, Tesco mounted a huge advertising campaign insisting it was changing that it would pay farmers a fair price for their produce and honour its responsibilities to the food supply chain. Last year the former chief executive, the recently dismissed Philip Clarke, even told me that people like him had to accept that the era of cheap food was over. It seemed the biggest player in the supermarket sector had finally woken up to the realities.

Or perhaps not. As Peter Kendall, then president of the National Farmers Union, put it to me at the time: while Clarkes heart was clearly in the right place, the company is an unwieldy tanker to turn around. How does he convince the whole of Tesco? Indeed. It turns out that while Clarke was promising a brighter tomorrow, his own colleagues were still hitting up their suppliers for donations, and ramping up the profit estimates so as to maintain the share price (significant numbers of which shares they all owned).

For here is a truth many find unpalatable: large-scale agriculture and retail is the route to a lower-carbon economy. Done properly it enables a more sustainable form of food production. We may like the fantasy of our food being produced by a chaotic patchwork of tiny farms run by women in dirndls and hoary old men with mutton chops and a bit of that is good for the diversity of the culture but when you crunch low-intensity yield against CO2 emissions, its not the most sustainable option.

http://www.theguardian.com/commentisfree/2014/oct/10/big-supermarkets-tesco-sustainably

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I don't quite get why people are flocking to aldi. Is it because of competition or deflation ? and are people over stretching themselves?

It's become fashionable.

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The local cornershop here has a captive market of grannies and welfare mums who cant drive...so get away with charging several times the supermarkets. Cant see that changing. The bakery and butchers seem to attract the trendy types whatever happens.

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D E F L A T I O N....the symptoms are everywhere before our eyes and yet we are told that all is well.

Other than the banks failing and thus taking the west down with them, what exactly is wrong with falling asset prices???

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Either you've misunderstood what Jay Rather was saying or the media have spun it in a direction to make him look like a middle class twit.

Jay Rather is supportive of large scale agriculture and supermarkets realising they are the only solution as to how to feed everyone economically and efficiently.

With regards to the price of food what he is saying is that the big supermarkets should have been paying more to the farmers rather than creaming off the margin to pay for store expansion, dividends and executive bonuses.

Ok, I'm sure he'll be pleased to hear I'II retract the knob-end bit. In fairness he has got a much better handle on the sector than a lot of media renta-gobs. In short summary though I think he overstates the poor farmer and poor suppliers angle. I'm really not sure 50,000 sqft+ hangar sized stores on town outskirts, with a huge energy bill, only practical to access by car are going to remain the lynch pin of food distribution in a connected economy.

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There is a feeling of having been conned by the incumbent supermarkets. Tesco will find it very difficult to pull this back. Even with theirclever deals and special offers, it is easy to go in Aldi or Lidl and spend 40% less than in Tesco or Sainsbury. We all realise that we pay more for convenience in corner shops. But the feeling of being had by the spivs in the supermarket chain, so they get rich on a share option scheme... that feeling will struggle to go away.

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Well at least the candlestick makers are ok.

It's good to hear that anyone who's anyone is off to the german discounters to buy a very limited range of groceries in a selection of brands no-one has ever heard of. Do you upload a video to Youtube of you doing it and then everyone donates money to charity, or something.

This is a pure high-grade BS media driven narrative. Many whole counties will have barely a single independent bakers or fishmongers within their entire boundary.

My butcher has no brands that no-one has ever heard of...no brands at all.

Just cuts of meat...and they match the price of any supermarket, and its always better and more tasty.

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When you can by a decent spanner for less than the cost of a single serving bag of potato crisps it doesn't tell you crisps are something difficult and complex to make, it tells you, for products made in this country, there are far too many fingers in the skimming pie.

Across products, I don't thnk it says anything about the number of fingers. I'd say it simply shows the price the market will bear. Compare the price of bottled water with milk. Or a ready meal with a packet of crisps. People are stupid with their spending.

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Guest eight

Across products, I don't thnk it says anything about the number of fingers. I'd say it simply shows the price the market will bear. Compare the price of bottled water with milk. Or a ready meal with a packet of crisps. People are stupid with their spending.

Well multipack crisps are >10p/packet in Lidl, and they come half more than halfway up the bag.

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No, local greengrocers are very competitive with the overpriced multi national supermarkets that have huge overheads that absorb margins......local providers that can and will sell sometimes supermarket reject food for less than half price.....wonderful green leeks without trimming and plastic covering, odd shaped healthy and cheaper veg, great 25kg sacks of MP pots £6.50 two big cauliflowers for a pound.....great seasonal fruit and veg.....even pick your own soft fruits that can be preserved or frozen to last a whole year. ;)

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