E-commerce analytics firm Profitero has published the results of its annual UK Price Wars study, revealing stark online price differences across 15 leading retailers, including Tesco, Asda, Amazon, John Lewis and Ocado.
The study analysed online prices for over 11,000 exact-matched products, finding that Amazon’s prices were an average 13% lower than other retailers across food & beverages and typical Christmas gift categories such as electronics, toys and video games.
Comparing prices across everyday essential items, Profitero found the cost of food & beverages was an average 7% lower on Amazon compared to other online grocery stores. Asda was not far behind with prices 5% higher than Amazon, followed by Ocado (7%). However, Tesco had the biggest price gap, where online prices for exact-matched products were found to be 15% more expensive, on average, than Amazon.
Amazon’s price lead in other essential categories such as baby products and household supplies was even wider. The online giant’s prices for baby products were 9% less expensive compared to Argos, Asda, John Lewis, Ocado and Very, and its prices for household supplies were 12% cheaper compared to other retailers.
“As the cost of living surges, consumers will reduce spending on luxuries and prioritise the most essential everyday items, like groceries, baby and household supplies,” said Mark Wilkinson, Managing Director of EMEA & APAC at Profitero.
“Retailers need to offer shoppers more value in these categories to keep them loyal, not only by offering low prices on trusted brands but also by providing cheaper alternatives through strong own label and challenger brand offerings.”
Meanwhile, Profitero’s analysis for typical gift categories found Amazon to have the lowest online prices for beauty, electronics, toys & games and video games, with prices that were an average 14% lower than Asos, Argos and Boots.
There was strong price competition in both the toys & games and video games categories, with only a 5% price difference between Amazon and the second lowest-priced retailer (Smyths Toys). Online retailer Very was the least competitive with prices that were 15% more expensive than Amazon for toys & games, and 20% more expensive for video games.
Price differences in the beauty category were much wider, with a 12% gap separating Amazon and the second lowest-priced retailer ASOS. Tesco was 29% more expensive for exact-matched products.
Wilkinson concluded: “Cash-conscious consumers will cut back on discretionary spending, which means all retailers will keep dropping prices to prop up demand for non-essentials, off-setting some of the inflationary trends caused by supply chain issues. Consumers who do their research and shop around can make significant savings.”
Download Profitero’s full UK Price Wars report here.
NAM Implications:
- Amazon has hardly begun to flex their muscle yet…
- And given the stock market response to the anticipated fall in holiday sales i.e. shares down 20%…
- …they are not going to miss any sales available this Christmas.
- Be warned…
