Express pricing

Last updated

Express pricing is a form of price discrimination where, in a reverse of economies of scale, retailers raise their prices slightly in smaller stores. [1] The name of the practice originates from Tesco's Tesco Express stores in the UK, but the term can be used to apply to any retailer operating a similar policy. A 2018 Inside Out investigation, which looked at practices within Tesco, Sainsbury's, Marks and Spencer, and Waitrose, found that some smaller store prices were 178% more than prices in their larger-format counterparts. [2] According to Sainsbury's, this can be attributed to discrepancies in "operational requirements and running costs. Rents, for example." [3] The store stated that it can be "more of a challenge to deliver products to our local stores", [3] and referred also to "other factors such as staffing, local rates and a focus on convenience products". [3]

Tesco themselves have acknowledged this, saying "Our prices don’t differ greatly but they will differ slightly because of the difference in costs of running the smaller stores. Express stores are typically on the high street, which means Tesco don't very often own the land. So the overheads involved in running a smaller store are higher." [4]

In 2011, Marks and Spencer's policy of charging express pricing in their Simply Food branches was reported on. A spokesperson has admitted "prices are a little higher than at our high street stores". [5]

Aldi Local charged express pricing as soon as they opened. [6]

Express pricing attracted particular opprobrium in 2021 after Tesco rebranded 89 of its Metro stores into Express stores; with their Express branches not taking part in Tesco's "Aldi Price Match" scheme, many shoppers reported overnight price increases of up to 50% on some lines. [7] In 2022, News Shopper reported that there were differences in prices between Asda's Bexleyheath Graham Road superstore and their Crook Log supermarket. [8]

Related Research Articles

Tesco plc is a British multinational groceries and general merchandise retailer headquartered in Welwyn Garden City, England. The company was founded by Jack Cohen in Hackney, London, in 1919. In 2011, it was the third-largest retailer in the world measured by gross revenues and the ninth-largest in the world measured by revenues. It has shops in Ireland, the United Kingdom, the Czech Republic, Hungary, and Slovakia. It is the market leader of groceries in the UK.

Safeway Limited is a British groceries brand, and former chain of supermarkets and convenience shops. The British Safeway was founded in 1962 by the American Safeway Inc., before being sold to Argyll Foods in 1987. It was later listed on the London Stock Exchange. It was purchased by Morrisons in March 2004. Most of its 479 shops were rebranded as Morrisons, with others being sold. Safeway-branded shops disappeared from the United Kingdom on 24 November 2005.

<span class="mw-page-title-main">Morrisons</span> British supermarket chain

Wm Morrison Supermarkets Limited, trading as Morrisons, is the fifth largest supermarket chain in the United Kingdom. As of 2021, the company had 497 supermarkets across England, Wales and Scotland, and one in Gibraltar. The company is headquartered in Bradford, England.

<span class="mw-page-title-main">Asda</span> British supermarket chain

Asda Stores Limited, trading as Asda and often styled as ASDA, is a British supermarket and petrol station chain. Its headquarters are in Leeds, England. The company was incorporated as Associated Dairies and Farm Stores in 1949. It expanded into Southern England during the 1970s and 1980s, and acquired Allied Carpets, 61 large Gateway Supermarkets and other businesses, such as MFI Group. It sold these acquisitions during the 1990s to concentrate on the supermarkets. It was listed on the London Stock Exchange until 1999 when it was acquired by Walmart for £6.7 billion. Asda was the second-largest supermarket chain in the United Kingdom between 2003 and 2014 by market share, at which point it fell into third place. As of November 2024 its market share in the UK is 12.5 per cent.

<span class="mw-page-title-main">Sainsbury's</span> British supermarket chain

J Sainsbury plc, trading as Sainsbury's, is a British supermarket and the second-largest chain of supermarkets in the United Kingdom.

Tesco Ireland Limited is the Irish subsidiary of supermarket group Tesco. Tesco Ireland was formed by Tesco plc's 1997 purchase of the Irish retailing operations of Associated British Foods, namely Powers' Supermarkets Limited and its subsidiaries, trading as Quinnsworth and Crazy Prices. There are 152 Tesco stores in operation in Ireland as of August 2018. Tesco had approximately 21% of the Irish grocery market in 2021 and its main competitors are Dunnes Stores and SuperValu.

Somerfield was a chain of small to medium-sized supermarkets operating in the United Kingdom. The business started life in the 19th century as grocers J. H. Mills, and after a series of buyouts and mergers, the company became known as Gateway. A major rebranding to the created Somerfield brand started in 1990, and in 1998 the company purchased the Kwik Save chain of discount food stores. The company was taken over by the Co-operative Group on 2 March 2009 in a £1.57 billion deal, creating the UK's fifth-largest food retailer. The Somerfield name was replaced by the Co-operative brand in a rolling programme of store conversions ending in summer 2011.

Netto is a Danish discount supermarket brand operating in Denmark, Germany and Poland. Netto is a part of the Salling Group.

Kwik Save is a British convenience store chain. Prior to 2007, it was also a discount supermarket chain that had shops across the United Kingdom. It went into administration in July 2007, but was brought back in April 2012. Its shops were small to medium-sized high street supermarkets, mainly located in areas with below average incomes.

In Ireland, the retail sector provides one of the largest sources of employment in the economy, representing over 12% of the workforce. As of 2017, approximately 40,000 wholesale and retail businesses employed almost 280,000 people in Ireland, with the Department of Enterprise, Trade and Employment reporting that 90% of these businesses were Irish-owned.

The Grocer is a British digital and magazine service devoted to grocery sales, published by William Reed Ltd. It has been published since 1862.

<span class="mw-page-title-main">Criticism of Tesco</span>

Criticism has been directed at Tesco from various groups, including national organisations, trade bodies, individuals, consumer groups and watchdogs, particularly since the early 2000s.

Sainsbury's Local is a chain of 820 convenience shops operated by the UK's second largest supermarket chain Sainsbury's.

<span class="mw-page-title-main">SavaCentre</span> Former British chain of 13 hypermarkets

SavaCentre was a chain of 13 hypermarkets and later a further seven discount supermarkets owned and operated jointly by Sainsbury's and BHS, beginning in 1977. Sainsbury's later took full control of the stores alone in 1989, rebranding them as Sainsbury's SavaCentre, until 2005 when the stores were integrated into the Sainsbury's supermarket brand. The hypermarket stores ranged in size from 66,000 sq ft (6,100 m2) to 117,000 sq ft (10,900 m2) and the discount supermarkets ranged in size from 31,000 sq ft (2,900 m2) to 70,000 sq ft (6,500 m2). At the time of its inception, it was the only dedicated hypermarket chain in the UK.

<span class="mw-page-title-main">Broadway Shopping Centre, Bexleyheath</span> Shopping mall in Greater London, England

Broadway Shopping Centre is the principal covered shopping centre in the town centre of Bexleyheath and is the largest single covered shopping facility in the London Borough of Bexley.

Tesco Town is British slang for an area where one retailer has large market share. Although the term references the Tesco chain of stores, it can be used to describe any area dominated by one particular retailer.

In the United Kingdom, it is common practice for retailers to have their own value brand in an effort to compete on price. These brands have become more popular in the UK with shoppers since the Great Recession caused food prices to rise.

References

  1. ↑ Brown, Amy Christine (2010). Understanding Food: Principles and Preparation. Cengage Learning. ISBN   9780538734981.
  2. ↑ "Big chain supermarkets hike prices at smaller branches". BBC News. 19 November 2018. Retrieved 24 August 2021.
  3. 1 2 3 "Why are prices different between your large and convenience stores". Sainsbury's . Retrieved 10 November 2013.
  4. ↑ "Mystery shop: Tesco vs. Tesco Express". Confused.com. Archived from the original on 29 December 2011. Retrieved 29 May 2013.
  5. ↑ "Mystery shop: How much do you pay in M&S Simply Food?". Confused.com. Archived from the original on 27 September 2013. Retrieved 3 June 2013.
  6. ↑ "Inside the first Aldi Local: what it's like to shop at the supermarket's high street store". i. 21 March 2019. Retrieved 24 August 2021.
  7. ↑ "Tesco are fleecing London's poorest by changing 'cheap' Metro stores to Express, says mayor". MyLondon. 17 August 2021. Retrieved 24 August 2021.
  8. ↑ "Shopper shocked at price differences in Asda Bexleyheath stores". News Shopper . Retrieved 9 November 2022.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.