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Shoppers have always been obsessed with price, and now even more so due to recent media hype and high profile price focused campaigns by the major multiple grocers – Right?  WRONG!!  

Contrary to popular industry belief, most UK grocery shoppers don’t shop where they think it is cheapest.  Only 79% of Kwik Save shoppers think Kwik Save is the cheapest store in their area, this drops to 56% amongst Asda shoppers and 43% for Tesco’s shoppers.  So what are the main reasons for shopper store choice (see chart 1) ?

CONVENIENCE and TIME – Nearness, speed (74%) – is the overwhelming predominant reason given by shoppers for store choice at all of the top UK multiples.  

After convenience, shoppers cite FACILITIES (47%) – mainly car park and toilet, but also crèche, restaurant etc., and then PRICE (45%).  Price in this context includes loyalty cards, promotions etc. but pure price (cheap, economical) is in fact only mentioned on average by 27% of all UK shoppers as their reason for store choice.  

If you accept that convenience ceases to be a defendable selling point as soon as a retailer commits to a site – if someone opens nearer to your shopper you’ve lost them – and price is a costly and short-term “me-too” tactic, then the clever retailer will choose to focus on other criteria to attract and retain its shoppers, such as range, staff and quality where there is greater scope for differentiation.

The issue of price becomes even less critical in the convenience sector, if somewhat more complex.  When asked if an item costs £1 in a supermarket/ superstore how much would you be prepared to pay for it in a c-store, UK shoppers cite an average premium of 13% (see chart 2). Sales staff, branch managers and head office executives all think shoppers are prepared to pay a significantly lower premium for convenience – as an industry we must improve our shopper sensitivity and bring own obsessions with price in line with shoppers’ feelings.  

So in a perfect world convenience shoppers are willing to pay for the time saving luxury offered by the convenience retailer, but only if it is truly convenient, i.e. product available, quick service in a professional environment.  Unfortunately this is not often the case, as standards are not as high as they should be and the convenience sector continues to be plagued by a history of negative price perception.  

The good news is that the problem is one of shopper perception rather than trading reality. When asked the price of an item they are in the act of buying, 55% of c-store shoppers quoted a price higher than the prevailing in-store price or couldn’t guess (see chart 3). 

They think they are paying more than they actually are!  This misconception contributes to an overall low opinion rating on the acceptability of c-store pricing, which naturally impacts on spend and traffic.  The solution is not to hike up prices and thus confirm their suspicions, but to communicate better the already better than perceived prices, whilst at the same  time improving all other aspects to take the heat off price.

Key findings from Harris International Marketing’s Convenience Tracking Programme, and its study on superstore shoppers (HISPI).  For more information contact Olivia Buckle on Tel. 020 74284987 or visit www.him.uk.com

CHART 1: Reasons for Store Choice

CHART 2: C-Shoppers Price Tolerance

CHART 3: C-Shoppers Price Awareness

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