Sainsbury's taking Tesco to court over Price Promise – a definition of like-with-like?

Sainsbury’s move to obtain a judicial review is good in that it is an attempt to distinguish a legal ‘letter-and-spirit’ issue from a true like-with-like comparison of what a consumer gets for the money.

In other words, when Tesco and the watchdog's independent reviewer Sir Hayden Philips focus on function of the product, bottled water in terms of say quenching thirst, they are adhering to the letter of the law ref like-with-like comparability.

In doing so, they are not taking into account the ‘spirit-of-the law’ issues such as provenance or ethics.

However, the consumer places some value on ‘source’ and is prepared to factor some of this value into the offering when deciding that a price is acceptable, compared with available alternatives.

Consumers live by what they take to be the spirit of the law and feelings of being misled arise when a ‘letter-of-the-law’ claim is found to be wanting in practice, as any true marketer will appreciate.

The problem for the judiciary will be in trying to establish a universal value for provenance or ethics….

However, in the meantime, the media coverage will hopefully cause consumers - and retailers - to think a little more deeply about making a like-with-like comparison that goes a little closer to the spirit rather than simply the letter of the law in deciding that a given Product-Price-Presentation-Place combination is better value for money…

When less is not more: How small packs work out cheaper than bulk-buy deals

Product	Store	Big pack	Small pack
Cathedral City Cheddar	Asda	£6.98 (2x 350g)	£2.00 (350g)
PG Tips tea bags	Asda	£4.68 (160)	£2.00 (80)
Nescafe coffee	Asda	£11.50 (500g)	£5.00 (300g)
Clover spread	Asda	£3.70 (1kg)	£1.00 (500g)
Loyd Grossman Sauce	Tesco	£2.79 (660g)	£1.00 (350g)
Napolina Olive Oil	Tesco	£6.49 (1 ltr)	£3.00 (500ml)
Mild cheddar	Sainsbury’s	£3.10 (400g)	£2.05 (270g)
Filippo Berio Olive Oil	Waitrose	£7.59 (1 ltr)	£5.49 (750ml)
Absolut vodka	Waitrose	£19.60 (700ml)	£9.00 (350ml)
Scottish Still Water	Sainsbury's	79p (750ml)	45p (500ml)

                                                                                                         
Source: Daily Mail survey

The mismatch tends to happen when supermarkets cut the price of small packs for a temporary promotion – or to match reductions at a rival. Whilst the mix-ups are understandable, the real issues are the impact on the savvy consumer-shopper and probable distortion of demand.

However, apart from an inevitable spike in small-pack sales for the duration of the price-cut, retailers need to monitor the effect of the resulting suspicion and lack of trust in terms of impact on shopping behaviour for the remainder of the shopping trip.

For suppliers, the issue is more about the extent to which the shopper blames the brand, rather than the store...

…and since you are probably picking up the promotion-tab, perhaps it is time to add multi-size analysis of unit prices to your promotional checklist in assessing the ROI on the initiative…? 

True like-for-like comparison - the impossible dream?

In yesterday's Telegraph, Mike Coupe made an elegant, if rod-for-own-back, case encouraging the consumer to aim for true like-with-like comparison when considering an on-shelf purchase. 

Specifically, a shopper should factor in provenance or origin of the goods as part of the total offer, especially in the case of fresh produce. He also correctly  points out that the quality standards should apply all through the category, and not just the high end. In other words, shoppers deserve to have their needs met, all the way to the stomach, and beyond, whatever the price-point.

The problem is that we as consumers have become lazy. 

Having been aggressively aroused from a 30 year credit-fueled dream, where we outsourced our thinking in terms of unrealistic reliance on politicians, and bankers in the expectation that they could be taken at their word, allowing us to get on with consuming....confident that if a product or service failed to deliver, legal machinery existed to punish those who mislead us.  Clearly, the last few years have demonstrated that we are all on our own, so to speak...

The issue is expectation management. 

As we all know, branding was invented to assure purchasers that the contents would live up to the expectation created by the description on the tin. However, even this 'guarantee' can be jeopardised by one disaffected night-shift worker popping behind a packing case and 'interfering' with an unsealed tin, before putting it back on the line...  As consumers, we still need to check the contents before eating.

Even more so in the case of fresh produce. In practice ethical sourcing is an aspiration, not a guarantee of quality. It is impossible for a retailer to give a 100% guarantee without sampling 100%, and we are unrealistic to expect otherwise.

When the product comes from 'out foreign' our traditional  upbringing taught us that we need to be doubly cautious  of origin and treatment of the animal concerned in evaluating sources, again totally confounded by the fact that the horse meat crisis demonstrated that even closer to home even vigilant  sourcing can allow faulty content to slip through...

Think about it, if a horse carcass can be purchased for £15, and sold for £700 as beef, then someone in the chain will be tempted to take a short-cut.

At best we can take a reasonable guess - our call - based upon a reliable retailer's best efforts, in deciding that one product is a better deal than another.
And if a brand or retailer appears to short-change our expectation, at least most if us still have the ability to vote with our feet, and perhaps tell a friend....