The food shopping habit that's costing you more than you think
You can’t have failed to notice it. Butter, bread, milk, vegetables – they are all more expensive. Inflation may have started to flatten out in other areas, but in Britain food prices are still escalating. Small wonder we are turning back to the supermarkets after our pandemic dalliance with local independents. That name over the door offers security, a familiar store that (whatever our concerns about the power of the big retailers) promises a standardised, convenient and affordable shop.
Or does it?
The prices at some branches of supermarkets with well-known names are startlingly different from prices elsewhere under the same name. For instance, a recent report by ESA Retail showed that goods in Tesco Express are 10.4 per cent more expensive than in larger Tesco stores, while Sainsbury’s marks up by an average of 8.4 per cent in its Local branches.
Grabbing dinner from a convenience store on your way home may well see you shelling out a lot more than if you’d shopped at the same chain’s superstore.
A trawl around my central Bristol Sainsbury’s Local and Tesco Express revealed jaw-dropping differences in the prices of almost everything, and this practice is by no means restricted to these two chains. It’s clear that the price you pay for your shopping in a supermarket depends not just on which chain you shop in, but where the branch is, who runs it and what the opening hours are.
There’s no law that says all supermarkets of the same group have to charge the same prices, and the range of items they sell makes it impossible for them to impose a rigid pricing structure across all their branches in the same way that simpler setups, such as McDonald’s or Greggs, are able to do.
Yet there’s no question that customers subliminally expect this uniformity on prices, and know little of the complex reasons why they very rarely get it. Understanding a little more about these factors can have a big influence on how you go about your shopping, and a major impact on your bank balance.
Convenience stores are as old as shops themselves, although in Britain we used to simply call them corner shops. While there is no legal definition of a convenience store, it’s taken in the trade to mean a shop of less than 3,000 sq ft that includes stock from at least eight of the 13 “retail categories” – so a general shop rather than a specialist shop.
Currently, the UK has about 7,500 large and mid-sized supermarkets and 48,600 convenience stores. According to a report by The Association of Convenience Stores, 71 per cent of the latter are independent, including franchises such as Spar, and 29 per cent are part of multiples. The latter includes 7 per cent of Co-operative stores, all classified as convenience stores.
Eleven years ago, according to Chris Noice, of the ACS, the share of convenience stores owned by the multiples was just 23 per cent, of which 5 per cent were Co-ops. Unlike the latest figures, the 2012 numbers include petrol station forecourt stores, so it’s likely the growth is even larger than it initially appears.
Supermarket chains first launched convenience stores back in the 1990s. Adam Leyland, of The Grocer, explains that “this expansion was encouraged by new legislation limiting Sunday trading to stores of less than 3,000 sq ft. Tesco snapped up independent convenience store chains at the double and has never looked back, with rivals following suit.”
As well as swerving limits on Sunday trading hours, meaning they can mop up more of our spending, these smaller shops have tapped into the zeitgeist. Supermarket chains have been growing their cohort of convenience stores as they recognise that over the past 20 years there has been a shift from the big “weekly shop” in the megastore towards smaller, more frequent purchases from handier locations.
There are other advantages, too: councils, noting the damage being done to high-street trade, have moved away from permitting big out-of-town supermarkets, so it may be easier to get planning consent for more compact town-centre shops.
So why do these convenient mini-stores with their cheery branding charge significantly more for the same goods? I asked the chains for an explanation. “Sainsbury’s Local stores are located in city or town centre locations and their operating costs, for example rent and rates, are higher,” I was told.
Tesco takes the same line: “Our Tesco Express stores are mainly in built-up areas where rents, rates and the operating costs for these stores are higher.” An Asda spokesman was more specific, explaining that “Convenience stores are open for longer hours than standard stores and delivery costs are often higher, as small batches of products are delivered more frequently.”
Sainsbury’s explains its position in a statement on its website in the “prices and payments” section, but it’s not something you’d stumble across. In fact, the supermarkets have been operating a smoke-and-mirrors campaign to keep us from noticing just how much more expensive their spin-off stores are.
While the big supermarkets assured me they match their superstore prices with those on their online shop, there’s nowhere to check the prices you’ll face at Tesco Express, Sainsbury’s Local, Morrisons Daily, Little Waitrose or the newly launched Asda Express. Your receipt may come as a shock.
A spokesman for Marks & Spencer explained that the M&S model is different, with online prices set by Ocado, which runs the online delivery service, so they may differ from in store. Most M&S Simply Food convenience stores (along with Morrisons Daily and all Co-op shops) are operated on a franchise basis, so the prices are set by the franchisee.
Limited stock is another reason buying groceries in a supermarket convenience store can add up to more than you planned. The supermarkets point out that there isn’t space to stock the full range (fair enough), but this can often mean the budget ranges are omitted, so you’ll be pushed into trading up and paying extra.
This feels particularly harsh when it comes to healthy food. Take plum tomatoes. A 300g box of baby plum tomatoes costs £1.15 in Tesco Express (£3.83/kg), but a 325g box in a Tesco superstore is just £1 (£3.08/kg). Online you can opt for the Nightingale Farms budget range, which, at 69p for 250g (£2.76/kg), is more than 25 per cent cheaper.
There are anomalies, when a cheaper price seems to have sneaked in. Pringles were just £1.90 when I looked in my Tesco Express, when the online price was £2. That said, Pringles poppers should note that another student favourite, the King Pot Noodle, is a full 25 per cent more expensive in a convenience store, at £1.25.
I found 500ml Filippo Berio extra virgin olive oil for £5.50 in Sainsbury’s Local, when the online price is £6.50. Tesco Express had it for £6, the same as the online price, although you’d need to be in a larger store to bag the 1l bottle for £9. Saving money by buying larger sizes just isn’t an option for the convenience-store shopper.
And what about the friendly corner shop that is being squeezed out by the seductive charms of the supermarket convenience store? For while it’s true that the supermarket shops still have to deal with the added costs of a smaller town-centre shop, independents don’t have the massive buying power of the multiples, which can drive suppliers’ prices down.
Aidan Fortune, of Convenience Store magazine, is phlegmatic. “Nobody wants to see more competition in their area,” he tells me, “but independent retailers don’t fear a multiple-owned convenience store opening near them as much as they may have done in the past.”
He reckons that consumers are on to them, however, adding that “shoppers are more savvy about pricing and recognise there is a discrepancy between the prices in a retailer’s larger stores and their convenience sites”. I’m not so sure. We are hard-wired by decades of marketing that portrays the big chains as the cheapest options, led to believe that the brand means the best value and that we’ll save money by shopping there.
Then there are the outlets attached to petrol and service stations. Exhausted and demoralised by hours of staring at tarmac and car bumpers, we are the ultimate captive market for them. Run as franchises, whether they are Waitrose, Asda on the Move or M&S, they have free rein with the prices.
I popped into Waitrose in a service station near Bristol to pick up a packet of digestives and found it cost £3.15, nearly double the larger store price of £1.60. Other markups were less enraging but still eye-watering. A tub of Waitrose Chicken & Vegetable Broth cost £3.80, 18 per cent more than the online price of £3.20, and 50 per cent more than its current special offer price of £2.52. On the upside, a box of tea bags (80 Organic Clipper tea bags) cost £3.85, 5p less than the online price – but it’s the only “ordinary” black tea on offer, and a dear option if you usually buy Waitrose own brand at £2.10.
Of course, service-station rents have to cover the cost of providing lavatory facilities and extended hours by law. But convenience stores that are located in residential areas are a different matter.
As Reena Sewraz, Which? retail expert, points out, “For those who can shop around, picking up a last-minute dinner ingredient at your local convenience store can make life easier, but for some households the extra cost and restricted choice could be making it even harder to put food on the table during the cost of living crisis.”
People who have no car, poor access to online deliveries and are on a low income are likely to be the ones with no choice but to buy from more expensive convenience stores, which is why the Consumers’ Association, who produce Which? magazine, is campaigning for supermarkets to be more transparent in their pricing, as well as for supermarkets to make sure that food is affordable and that budget lines are available in all stores, especially in the areas where people are suffering the most.
There’s no doubt that convenience shops are very handy, and in many areas the supermarket versions have pushed the independents to up their game, which can only be a good thing. A report from the meal-kit delivery company HelloFresh estimated that we spend 260 hours a year food shopping – that’s two years over a lifetime. Surely a little less time is worth a few more pence?
Ultimately, convenience comes at a cost – and we must decide how much money we’re willing to part with. Shop online and you know you have to cough up for the delivery; choose a Little, Local, Express, Food or Daily and face the fact that it is likely to be more expensive. Maybe we need to recognise not just the price, but the value of a local store.