Supermarket prices

[Ringo]

TESCO Ireland said yesterday that comparisons with Northern Ireland prices are damaging their reputation and sales, forcing them to start purchasing more goods directly through the UK supply network in order to narrow the gap.

A confidential document circulated to suppliers said they were moving to source all international branded goods directly through their UK commercial operation because of the damage done by higher prices in the Republic. "Consumers, media and Government associate Tesco Ireland almost exclusively with price differentials between Northern Ireland and Ireland," it said.


Because Tesco did not have a strong presence in the border towns, the impact of cross-border shopping did not "net out" across the group through increased sales there, as would be the case for international suppliers, it added
http://www.independent.ie/national-news/tesco-price-plan-will-bypass-irish-suppliers-1711740.html

I think it's all about their lack of Border stores, so it doesn't balance out. I do feel their much cheaper lately.

[Macy]

It's pure buck passing, or trying to drive down the prices they pay in Ireland. The problem isn't the prices of goods, it's the margins that Tesco puts on products that is the problem.

On the wider case of prices, Tesco is only price matching Lidl and Aldi from what I can see, I haven't seen too many examples of it undercutting. And at that, they price match with a smaller and/or inferior product a lot of the time. The CSO figures underlying the Consumer Price Index are only showing marginal reductions in food prices.

[pete]

Retailers will always charge what the consumer will pay & its not like Irish retailers charge less than UK imported retailers.

The states job is to ensure their are no anti-competitive practices & that new new retialers can enter the market. Competition will keep prices down. I am sure Aldi & Lidl would not have come to Ireland if they did not see an opportunity due to high margins of the Irish retailers.

I would guess there may be more middle-men in the Irish market although not sure how Tesco source their products.

[Ringo]

It's pure buck passing, or trying to drive down the prices they pay in Ireland. The problem isn't the prices of goods, it's the margins that Tesco puts on products that is the problem.

On the wider case of prices, Tesco is only price matching Lidl and Aldi from what I can see, I haven't seen too many examples of it undercutting. And at that, they price match with a smaller and/or inferior product a lot of the time. The CSO figures underlying the Consumer Price Index are only showing marginal reductions in food prices.

It must be hurting them, with no border shops. They'll charge what they can get away with.

[Macy]

Irish Times reporting that Tesco Ireland has a profit margin of 9.3% (projected to actually rise despite the reductions to 9.5%), whilst the rest of tesco operates at under 6% Profit margin. Puts all their bs last week into perspective anyway.

http://www.irishtimes.com/newspaper/frontpage/2009/0511/1224246256045.html

[pete]

Irish Times reporting that Tesco Ireland has a profit margin of 9.3% (projected to actually rise despite the reductions to 9.5%), whilst the rest of tesco operates at under 6% Profit margin. Puts all their bs last week into perspective anyway.

I am no expert but 9% margin on supermarket sales seems very large especially for a mass retailer. I would guess the competitors on similar margins.

It would be very interesting to know how the IT got that as I am sure Tesco will be furious that such commercially sensitive info is in the public domain.

[Macy]

It would be very interesting to know how the IT got that as I am sure Tesco will be furious that such commercially sensitive info is in the public domain.
A clue could be in the article...

According to the document, Tesco Ireland’s head office in Dún Laoghaire is being “transformed” into a country office by redeploying roles to the UK and outsourcing work to India. This is expected to save €13 million

[pete]

I saw that earlier but wondered what a country office was... Doesn't sound as glamorous as Head Office. Tesco Ireland losing its independence...?

[OneRedArmy]

What independence? It's a subsidiary of a British multiple whatever way you look at it.

[Sheridan]

Friend of mine has a fairly senior position in Tesco in the UK. Apparently one of the factors which makes their operation less profitable in Ireland is the low take-up on online shopping, which is something like 80% lower than in the UK (where it rakes in obscene amounts for them.)

[pete]

Friend of mine has a fairly senior position in Tesco in the UK. Apparently one of the factors which makes their operation less profitable in Ireland is the low take-up on online shopping, which is something like 80% lower than in the UK (where it rakes in obscene amounts for them.)

Did you see post 5. Apparently they are more profitable in the ROI.

I am not that surprised by higher profits here as far less competition in Ireland. Surprised by 6% profits in other markets but I suppose that is why Tesco are a massive company.

[Lionel Ritchie]

Friend of mine has a fairly senior position in Tesco in the UK. Apparently one of the factors which makes their operation less profitable in Ireland is the low take-up on online shopping, which is something like 80% lower than in the UK (where it rakes in obscene amounts for them.)

I'm not surprised. We tried it a few times with disappointing results. Veg, fruit, bread was commonly tatty. Milk ALWAYS came in plastic see-through cartons NEVER in cardboard ones and no means of specifying a preference with such items existed.

[Macy]

Apparently one of the factors which makes their operation less profitable in Ireland is the low take-up on online shopping, which is something like 80% lower than in the UK (where it rakes in obscene amounts for them.)
But they have a bigger profit margin here.


The document reveals that Tesco Ireland’s profit margin, which has long been a closely-guarded secret, was 9.3 per cent last year and is projected to rise to 9.5 per cent this year. This compares with a margin of under 6 per cent in its parent company.

tbh, trying to blame the lack of online shopping just sounds like another bogus excuse. Every time one of their arguments gets disproved, they come up with another one.

[osarusan]

Maybe he means the bigger profit margin in Ireland is to make up for the lower turnover in online shopping?

[pete]

Aldi announces price cuts (http://www.irishtimes.com/newspaper/breaking/2009/0514/breaking34.htm)



German discounter Aldi has joined the grocery price war with reductions on over one-quarter of its range being introduced from today.

Aldi said the price reductions were long-term and were available in all its 67 stores throughout the country.

The price cuts include 20 per cent off olive oil, €1 off a free-range Irish chicken, 33 per cent off toilet rolls and 33 per cent off bananas.

Aldi, which earlier this week began construction of a major new distribution hub in Mitchelstown, Co Cork, also stressed its Irish links yesterday. It says more than 40 per cent of all grocery sales are on products bought from Irish suppliers, producers and manufacturers and this business is set to grow in the coming months.


Hopefully the starting of a proper price war as this is good news for everyone.

[dahamsta]

Hopefully the starting of a proper price war as this is good news for everyone.Try thinking beyond yourself and the short-term for once in your life pete. A so-called "price war" may benefit consumers, but it certainly won't benefit retailers - maybe not such a bad thing, but still not "good news" for them - and there's an enormous risk of Irish producers and manufacturers going out of business because of it. That would in turn result in higher unemployment, lower exchequer revenues, and further homogenisation and less competition in retail. And less competition in retail ultimately means higher prices, not lower.

I'm not saying that's what'll happen, but there's certainly a major risk of it if a "price war" gets out of hand. And, once again, it's not "good news for everyone"; which, to be perfectly frank, is the kind of gormless statement I'd expect to hear our retarded friends in the Star trumpeting.

The large majority of "Irish" chickens come from the North by the way.

adam

[Macy]

Hopefully the starting of a proper price war as this is good news for everyone.
Only if they're taking it from their margins. All the indicators are that it is going to be a squeeze on suppliers which is where Dahamsta's point comes in. As pointed out the other day, Tesco expect their margin to go up even with the price drops, so it is of no consequence to them.

[dahamsta]

A Boards.ie summary (http://boards.ie/vbulletin/showthread.php?t=2055564837) of an investigative piece on RTE radio:


* Tesco's actual price decrease is 8%, not 22% as claimed by Tesco's chief executive, Tony Keohane, several times (he played the interviews with Tony Keohane). * That 8% decrease is in fact only a decrease on Tesco's 10% plus price increase in its stores since Christmas.
* Tesco has now approached all Irish suppliers demanding a 20% decrease in their prices.
* While Tesco has claimed Irish suppliers would not be affected by the "decrease", all Irish suppliers have reported that almost overnight Tesco has reduced the shelf space for Irish produce
*In 1997 when Tesco entered the Irish market, Richard Bruton, who was minister for Enterprise, signed an agreement with Tesco whereby Tesco committed themselves to purchasing a huge amount of Irish products. There was no attempt by the Irish government to renew this agreement in 2002. This is certainly going to be called for now.
* Tesco refused to respond to any of the report or defend its position.And from the IT article (http://www.irishtimes.com/newspaper/ireland/2009/0514/1224246463054.html) referenced in that post:
RETAIL GIANT Tesco is to lay off 140 staff at its headquarters in Dún Laoghaire following its decision to import more goods directly from the UK rather than sourcing them through Irish suppliers.I'm not going to jump on the bandwagon, I'll continue to do my main shop in Tesco for the moment, but I've already started buying some items locally, and I will stop shopping their altogether unless they knock this on the head. It'll cost me more in the short term, but less in the long term.

[pete]

I'm not saying that's what'll happen, but there's certainly a major risk of it if a "price war" gets out of hand. And, once again, it's not "good news for everyone"; which, to be perfectly frank, is the kind of gormless statement I'd expect to hear our retarded friends in the Star trumpeting.

I could also suggest that is a typical Irish response. We all complain about high prices but then when they are reduced we complain about lower prices.

As you say yourself you will still do some of your shopping at Tesco. tesco will stock Irish products if consumers want it. If Tesco suddenly cut Irish products & we as customers don't like it we will shop elsewhere.

[dahamsta]

I could also suggest that is a typical Irish response. We all complain about high prices but then when they are reduced we complain about lower prices.Which is another typical Star response. I'm not complaining about lower prices, I'm complaining about price cuts being implemented at the cost of Irish producers, and I'm pointing out that in the long term, prices will most likely rise because of that. I've also posted clear evidence of both already happening, which you've typically ignored.

Seriously pete, ask them for a job, it's there for the taking. You can do a George Lee on it later and run for Fianna Fail. It'll be the perfect storm.

[Rory H]

Relax lads. Not the first time we've seen handbagging in Tesco I suppose

[pete]

Which is another typical Star response. I'm not complaining about lower prices, I'm complaining about price cuts being implemented at the cost of Irish producers, and I'm pointing out that in the long term, prices will most likely rise because of that. I've also posted clear evidence of both already happening, which you've typically ignored.

Firstly I don't believe any of the supermarkets when they say they have reduced prices by X% across the board as they try the same tricks. As consumers it is up to use to make our own decisions.

The quote above refers to Irish Suppliers. Irish suppliers would also include Irish distributers. Why should Tesco buy UK branded good from Irish distributers when they can source from the Uk cheaper? If they buying direct from the UK it would obviously mean less requirement for buyers in Ireland. I think Dunnes have also sought redundencies & I remember Superquinn leaving go i think 400 staff in Dundalk?

I worked for an Irish distributer before & Tesco don't need to buy from them as they have their own distribution network. Dunnes on the other hand don't have their own network so get the suppliers to deliver the products. The example prices given in the IT showed no change in Irish products such as Barry Tea but price reductions on branded UK products.

Lidl & Aldi don't seem to stock much Irish products. I don't hear anyone complain about their low prices because all their goods sourced from the UK & Europe. People complain about Superquinn being the most expensive but they probably stock more Irish produce than any one else.

We need a bit of perspective & must realise al prices are too high. I am sure Lidl & Aldi were attracted to Ireland when they saw the large profit margins.

[soccerc]

Lidl & Aldi don't seem to stock much Irish products.

Aldi source 40% of their product in Ireland with all meat, eggs, chicken and breads locally produced.
A signifcant proportion of their dairy and frozen products are also manufactured here as are the coffees, tea's and cakes

[dahamsta]

Aldi source 40% of their product in Ireland with all meat, eggs, chicken and breads locally produced.Not chickens soccerc, 60-70% of chickens come from NI. Not sure about eggs. That's across the board, though, seems to be a limitation of the southern supply chain.

[soccerc]

Not chickens soccerc, 60-70% of chickens come from NI. Not sure about eggs. That's across the board, though, seems to be a limitation of the southern supply chain.

LOL, I maybe should have said island of Ireland.

Another interesting fact that has recently come out is that while the fresh chicken is from the island of Ireland, the island's biggest processor sources all chicken for value added product, i.e. your Kievs, Marylands, Gougons etc from Brazil and Thailand

[John83]

...the island's biggest processor...
I'm left with the mental image of a giant blender somewhere outside of Naas. :)

[soccerc]

I'm left with the mental image of a giant blender somewhere outside of Naas. :)

Image is close, but locations are Dungannon and Craigavon.

Giblet blended with mechanically recovered meat processed and bleached counts as reconstituted chicken :eek:

[pete]

Another interesting fact that has recently come out is that while the fresh chicken is from the island of Ireland, the island's biggest processor sources all chicken for value added product, i.e. your Kievs, Marylands, Gougons etc from Brazil and Thailand

Are you saying that the package will say made in Ireland but the chicken itself if Thai?

Not at all surprised by that. I think there was some report recently that very little Irish chicken used in food businesses such as take aways. I don't see anything wrong with that as long as the consumer knows what he/she is buying. Very difficult to track imported chicken added to processed food.

[dahamsta]

I fancied fish fingers for my tea last night, but not one of the ones in Tesco had "Irish" or "Ireland" on them. A couple of packets had "$Blah Pollock" or "$Blah Cod" (where $Blah is a non-European country I can't remember), and the rest had nothing at all. Isn't that illegal now?

[John83]

They still have fish fingers made of cod? I thought it was all generic white fish now.

[soccerc]

Are you saying that the package will say made in Ireland but the chicken itself if Thai?


That's it in a nutshell.

If the final processing act whether that's breadcrumbing frying or whatever occurs in Ireland then it can legitimately be labelled as Irish.

Look at most of the cheese in Irish shops, cheddar, sliced, grated, etc etc. It may well be cheese of Irish origin but the EU Health stamp will most likely be a UK one, as that's where most of the value added production took place.

Food labelling is not always what it appears to be:eek:


You know those lovelly chicken fillets, six for €7 or whatever, hmmmm, not Irish, pumped full of water, sucrose and nitrites to maintain that fresh plump look, except they are frozen then defrosted befroe sale..

Want Irish rashers, well you'll find them almost impossible to find. Most rashers in our shops and butchers is of Danish or Dutch origin and has been frozen before the final process, slicing, takes place here.

[pete]

I have noticed with own label products from all supermarkets that they use the "made specially for..." line without saying where they are made. Surely that is illegal?

I almost never buy meta from Tesco as feel it is poor quality. The one think I like about Superquinn is they put the name of the farm where the meat came fro on the label as well as the till receipt. Maybe it doesn't mean much but there is a feeling of reassurance.

After the dioxin pork scare not sure what value the Bord Bia labels are any more. It as discredited as the financial product adverts saying they are regulated by the Financial Regulator.

[red bellied]

I thought that any rashers marked by the tricolour (Dennys and Galtee) were only of Irish origin.

[Macy]

People should be buying meat from their local butcher - better quality and better prices (in my experience, and only recently comparing prices with Aldi meat).

Pork is the one meat I wouldn't get hung up on buying Irish actually - our standards are no better or worse than Denmark.

[Lionel Ritchie]

I have noticed with own label products from all supermarkets that they use the "made specially for..." line without saying where they are made. Surely that is illegal?

I almost never buy meta from Tesco as feel it is poor quality. The one think I like about Superquinn is they put the name of the farm where the meat came fro on the label as well as the till receipt. Maybe it doesn't mean much but there is a feeling of reassurance.
.

So do Dunnes Stores.

I'm very suspicious of meat products from lidl and not surprised that all the value added stuff is of Thai or Brazilian origin ultimately.

But labelling of a lot of food items is fork tongued and designed to give an impression of origin that doesn't match with the facts.

Seemingly chances are very slim with any meat product from The Netherlands that the animal ever put a hoof on dutch soil. So long as it passed through Rotterdam port it's relabelled Dutch.

Even Galway Bay Oysters could apparently be from anywhere they can get them and scarcely have to be dipped in the water to be legitimately labelled local produce.

Makes me admire lidls honesty on their jars of honey which simply announces 'Product of more than one country'.

[pete]

Makes me admire lidls honesty on their jars of honey which simply announces 'Product of more than one country'.

Almost all honey is labeled that way. Last time I looked there was no 100% Irish honey in the supermarket. Even the well known Irish brand labels they way you suggested above.

[Macy]

Almost all honey is labeled that way. Last time I looked there was no 100% Irish honey in the supermarket. Even the well known Irish brand labels they way you suggested above.
Isn't that just a reason not to buy honey from the supermarket rather than direct from beekeepers?

[pete]

Isn't that just a reason not to buy honey from the supermarket rather than direct from beekeepers?

Don't think I buy enough honey to make the trek to beekeepers assuming there are none in Dublin City ;)

[Macy]

No farmers markets in Dublin City at all? You'd be surprised I'd say anyway. I've seen people having them on apartment roofs...