Peace and quiet in the supermarket War *

*this domain name is still available…

Warholian like you... how dandy. One is from Lidl and one is not available there.  But which?!

Warholian like you… how dandy. One is only available from from Lidl and one is NOT available from Lidl. But which?!

The major supermarket players were very slow to recognise that this is structural change in the market place. And as is often the case when you get structural change, it is easy to just say ‘this is cyclical, it will only last a couple of years’ not understanding that this is a fundamental change in the way that Britain shops.

 So what is it, .., is it online shopping?  Must be!  But it is NOT.

A trusted institution we like

Our institutions are under attack. MPs and government are obviously beyond the pale. The press – forget it. Crime is falling, but can the authorities catch tax dodgers? they surely cannot… useless authorities… The police?… did you read about Operation Elveden?

We can’t even trust avuncular celebrities from yesteryear.

Why, the only institutions a gullible person can trust these days are supermarkets…  they’ve transformed the way we eat and they’re just trolley-pushing-lovely!

Aren’t they?!

EXCEPT that for some time, TV programmes have been examining them and sounding the alarm – which is brave considering how much they spend on TV advertising.  We used to hear about how supermarkets have been screwing over farmers and small shops, so the delicious problem they face now from discount retailers is strangely satisfying.  Because the big problem they face – we are told – is competition from the discount retailers Aldi and Lidl.

Schadenfreude is forgiveble in the face of Tesco’s hubris and obviously appropriate since these foreign retailers are German.

So I’ve just watched Supermarket Wars Dispatches on Channel 4, which showed how the big UK players – notably Tesco and Sainsbury’s had been out-manoeuvred by Aldi and Lidl.  The programme jumped around a bit, but its main point was that shoppers are bargain-hunting like never before and that Aldi and Lidl offer decent quality and low low prices to shoppers who want them: shoppers depart having spent far less money than in Tesco and Sainsbury’s. And these bargains are available because Aldi and Lidl offer less choice – they are more efficient.

Which is all true, and I knew it already.  We also had 78 seconds on the scandal of discounted lemons being offered on ‘discount’ as 4 for £1, after Tesco said they’d stop selling them so cheap.  They are now 25p each…

Go on.. tell us about an outrage involving oranges.

But the programme said something I’d not heard before, and also missed something out.  Or two things.

A road to nowhere

It pointed out that for all the vaunted charm of supermarket delivery, the supermarkets are losing money every time they deliver.  They might charge £4, but it costs 4 times that to collect and deliver all the items and to maintain the vans and websites. I’ll bet, though they didn’t say, that online shoppers buy fewer items.  [In the spirit of full disclosure I should point out that I loath online supermarket shoppers.  They are clearly lazy people who hate meeting other people: they probably avoid public transport too…]. Why are the rest of us subsidising these awful snobs by (the programme said,  £100 million per year)?

The programme did not point out that Aldi and Lidl don’t offer home delivery.

Lidl Finsbury Park, my regular hang-out. I carry the  stuff home, arms aching

Lidl Finsbury Park, my regular hang-out. I carry the stuff home, arms aching

The curse of choice

What the show also didn’t point out, was that Aldi and Lidl aren’t only popular because offering a narrower range allowed them to charge less.  They are popular BECAUSE of the smaller range.  We don’t NEED 45 types of pasta.  We normally buy the same staples anyway, so why would we want to see all the other shit?  It’s an unnecessary temptation.  Going to Lidl is a bit like going online anyway – it’s efficient and easy and we get to meet a charming person from Central Europe (though unlike online shopping, we don’t get them coming round to our house with our stuff).

The reason we spend less in Lidl and Aldi isn’t only because the prices.  It’s because we aren’t seduced into buying more stuff while we are getting what we actually need (and for what it’s worth, I do get utterly fed up with the discounts in Sainsbury’s on bulk buys of perishables – I don’t want to binge on fucking bread!).

What has all this to do with TV audiences?

Consider a couple of things.

What to innovate and why

I watched this programme on my Virgin Tivo PVR.  I watched some of the adverts and fast-forwarded some others.  If I’d avoided the adverts, I’d have been subsidised by the people watching the adverts on TV.  I’m like a person getting home deliveries and being subsidised for the privilege by the people who go to the shop.

For a supermarket, innovating might have involved scaling things back – concentrating on the staples shoppers actually buy.  Not offering loss-making deliveries to people who spend less money.  TV channels have to offer on-demand services and more chances to watch programmes, but if you’re a broadcaster you’re about wonderful big programmes aimed at broad audiences, NOT an illusion of personalised relationships.  The priority is finding those big programmes – and innovating there, not in delivery systems which lose money.

Waitrose Holloway: it's posher, and these days I get over-stimulated by the choice

Waitrose Holloway: it’s posher, and these days I get over-stimulated by the choice

The problem of choice

Yes, we like choice – it’s what being modern and developed is all about.. limitless choice, but as with food, the same for television: most people don’t, generally use much of the choice they have.  The average person watches around 4 channels each day.  As this advert from Freeview says, 95% of what we watch is available free on Freeview.  All the extra premium channels add up to relatively small viewing. Supermarkets gain from processing staples and adding a premium price (just as marketers have done to staples such as rice, flour and horse-meat).

So Lidl and Aldi are to Tesco and Sainsburys as Freeview is to Sky or BT Sport – offering what people what they need and not all the occasional fluff they don’t.

A sense of perspective

We learned today that Aldi and Lidl are growing, but their combined share is still only 8.4%.  Impressive, but only half of Sainsbury’s or Asda, and a third of Tesco.   Tesco’s share price has dropped by 28% in a year – and people are writing it off the way they used to write off ITV (and we can see what happened to them…)

How do Tesco and the others compete with Aldi and Lidl? By diverting some of the subsidies to online shoppers into the quality of the in-store experience, AND by offering quick-shop options and special stores, with far fewer choices, to people who want to come in and out quickly.  Why not call it Tesc or Tesl?  Or Sndl?

And they could ignore some of the wilder forecasts of their demise just as sensible TV channels do.

Consumer power?

Finally,… if you want a sledgehammer to make this supermarket /broadcaster analogy even more obvious…. the conclusion of this Dispatches programme was the usual mantra that the consumer is now in charge.  Aah yes. Consumers  are expressing their choice by giving it to discounters…

And yet, the wealthiest people in Europe we are told, are not into oil, or banks… no, they’re the people who own Zara, Lidl, Aldi, and H&M.

.So just as the internet has ushered in consumer power, and they‘ve chosen to give it all to Google, Amazon and Facebook, so shoppers are now in charge but giving it to the usual limited crowd.  When it comes to television programmes, the consumer has more choice than ever, which is great.  But we shouldn’t be fooled into thinking that the new players in TV – US tech firms which could buy up TV channels and barely notice it in their balance sheet – are about giving consumers more power.  Aldi and Lidl may not be monopolists, but the threat to television is coming from people who would like to be (and in some respects are already)