Leave town centres alone - picture by Doc Searles

A fun little point concerning how we consumers benefit from that capitalist lust for the profits to be made by exploiting us. As long as there are multiple capitalists competing to expropriate that is. Tesco has found that the discount retailers are running off with the business. Lidl and Aldi are providing what ever more UK shoppers desire – that’s good, we’re getting more of what we desire. As with the rise of the supermarket in the first place as it replaced the local shops on the High Street. So, Tesco has to compete:

Tesco will unveil its new discount chain Jack’s next week as the UK’s biggest supermarket throws down the gauntlet to the German discounters Aldi and Lidl.

Sure, some of us desire and enjoy that rather more upmarket experience. The butcher’s counter, arrays of cooked meats laid out for us and so on. And some would prefer to save the pennies and just grab the packaged box of whatever. Chacun a son gout and why not?

Which is the interesting point. Why didn’t Tesco do this before? Why weren’t they chasing that bargain basement sector of the market already?

Tesco previously tried the discount route in the 1980s with Victor Value , but the move was abandoned after four years because the management team at the time feared it might undermine the main brand.

Why piss in the soup by cannibalising your own higher margin sales? Which is where that necessity of competition comes in. If Lidl and Aldi are already taking that business then you’ve no concern about losing the business from your own stores, have you? So, it then makes sense to be competing against them and not yourself.

There’s an estimate out there that Walmart saves US consumers $220 billion a year. No, not in those famously low everyday prices. But in the fact that everyone else has to temper their prices and margins given the existence of Walmart. Which is exactly what Aldi and Lidl are doing to Tesco here. It’s not just that people who shop with the Germans save money, it’s that we all do because some do. Which is indeed how we all benefit from multiples of those rapacious capitalists aiming to profit from us.

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Spike
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The Walmart mention is true. A few Walmarts include gas stations, with low prices reduced 3 cents further if you pay with a gift card that you can buy with cash inside the main store. Any “gasoline price wars” in the state curiously locate themselves in the vicinity of such a Walmart.

BniC
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BniC

A whole back now, but one of the petrol station brands, Esso I think, was quite open that they would check prices at all supermarkets, who were just buying st open market prices, within a couple of miles radius and match them.
They had a rebate scheme for the station owners based on the submitted price data.

Spike
Member

Sale prices are public and there is nothing wrong with viewing and matching them (which all businessmen do to some extent). Talking to competitors about it, in the US (where “Esso” has been retired in favor of “Exxon” for decades) is illegal, even if the effect is identical. And paying competitors for information is Restraint of Trade — though consumers now have the same information via wiki on GasBuddy.com. In the GW Bush administration, some Department of Justice lawyers were overtly saying “no one can really define anti-trust.” But it is two decades later and the DoJ has learned to… Read more »