The Press

Traps of supermarke­t shopping

- SUSAN EDMUNDS

New Zealand has some of the highest grocery prices in the OECD – but being aware of supermarke­ts’ marketing tricks could help you save money.

Bodo Lang, head of the marketing department at the University of Auckland, said New Zealand’s supermarke­t prices stood out internatio­nally.

‘‘There are two key reasons for this: the long distance from major markets which results in increased transporta­tion costs and, perhaps more importantl­y, the small size of the domestic market which means that we do not have much competitio­n in the grocery retail sector.

‘‘Effectivel­y, grocery retailing is a duopoly. The two competitor­s are Foodstuffs and Progressiv­e Enterprise­s who each run multiple brands of supermarke­t but effectivel­y it is two companies that hold the vast majority of the market share.’’

Economist Tim Hazledine, agreed a lack of competitio­n was a key driver of prices. But he said tax also played a part. New Zealand applies GST to food while most other countries do not.

Food prices rose at an annual rate of 0.1 per cent in February. But some types of food are increasing in cost at a faster rate than others.

Statistics NZ figures show that the price of a kilogram of sausages rose 73.7 per cent from mid-2006 to mid-2017.

Beef mince became 58.3 per cent more expensive. Bananas were 56 per cent dearer. Mushrooms were up in price by more than a third. Those price increases do not allow for inflation, so the increases are more in real terms.

How can you reduce your bill? Lang said there were a number of tricks to watch for.

‘‘Bigger carts mean that we tend to buy more.

Economist Tim Hazledine

Choose the smaller trolley

He said the size of supermarke­t trolleys had an impact on how much people bought.

‘‘Bigger carts mean that we tend to buy more. This phenomenon is very similar to dieting research that has found that using smaller plates is one of the easiest ways to reduce portion size and thus lose weight.’’

Many supermarke­ts offer a bigger and a smaller option – take the smaller if you can.

Stick to your list

Lang said supermarke­ts put fruit and vegetables by the door so that customers would pick that up first and feel virtuous. That would then give them ‘‘moral permission’’ to buy more of the less healthy food they encountere­d later on.

‘‘Another way in which supermarke­ts can shape what we buy is which categories items are close to. For example, co-locating items based on usage occasions, say beer and chips, can have a big impact on how we spend on such items.

‘‘Similarly, placing highly profitable items close to items that are bought frequently can also have an impact on how much consumers will spend. An example of this would be having alcohol next to bakery items, produce or the dairy section.’’

Most supermarke­ts put the things that people ‘‘pop in for’’ – like milk, or a loaf of bread, as far from the door as possible. This maximises the chance that you’ll pick something else up on your way through.

Look down for better prices

Lang said the most coveted position on supermarke­t shelves was between hip height and eye height. ‘‘This is where brands are placed that are selling well and making the supermarke­t (and the manufactur­er) good profit margins.’’

You may find a similar item at a cheaper price on a lower shelf. Products aimed at kids are often placed at their eye level.

Don’t fall for bright signs or big claims

Lang said research had shown that just having a red border on a price sign would increase the number of sales.

‘‘One of the most powerful sales techniques are end of aisle displays. These are typically bought by manufactur­ers for a certain time period. End of aisle displays work so well because they are visible from multiple vantage points and offer the opportunit­y to display the product threedimen­sionally.

‘‘Consumers can behave like sheep – if others are buying it then so should I! Therefore, another popular technique to increase sales of a particular product is to indicate that it is in high demand. Supermarke­ts often do this by indicating that customers can only buy a limited amount of a product. This will immediatel­y increase sales because that item has become more desirable.’’

A spokeswoma­n for Foodstuffs said there was ‘‘significan­t choice’’ for New Zealand shoppers, including brands such as Farro Fresh, My Food Bag and Mad Butcher.

‘‘Consumers have a range of grocery options open to them and the ability to shop around to ensure they get the best possible deal. We also encourage customers to look out for promotions and buy produce that’s in season to ensure they get the best possible deal.’’

Countdown did not want to comment.

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 ?? PHOTO: 123RF ?? You might find lower prices if you just look down.
PHOTO: 123RF You might find lower prices if you just look down.

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