The Nation Newspaper

Tag: supermarkets

  • How forex fluctuation, unstable economy deter supermarkets from shelf price display

    How forex fluctuation, unstable economy deter supermarkets from shelf price display

    Shopping in supermarkets is increasingly becoming cumbersome as the unstable economy and price fluctuations have forced most supermarkets to display shelf prices of products.

    While some supermarkets have out rightly stopped the display of all prices, others display prices that are a bit stable, but those prices that have high fluctuation rates like prices of imported products are not on display at all.

    As a way to mitigate this, some supermarkets have resorted to fixing price scanners at the end of each shelf to enable customers to confirm the prices before coming to the pay point for payment.

    These supermarkets have shelf prices on their products, but as the prices of goods keep escalating every day, they find it difficult to change the prices on the shelves. This development is making shopping difficult for shoppers.

    Mrs. Jumia Olu who was on a shopping trip last week to the popular Blenco Supermarket, Akowonjo, Lagos, said she was so frustrated as she had to take each item to the scanners attached to the end of the shelves.

    “Not a single price was displayed on the shelves. For each product, I had to scan them myself, and return them to the shelf, when I decided against buying such. This has taken the joy out of shopping, but I do not blame them, it is the economy,” said Mrs. Olu.

    At the supermarket within the City Shopping Mall, Lagos, located opposite the Muson Center on Lagos Island, most of the shelf prices were not on display causing shoppers to wear drawn faces. “Shopping is no longer fun and much more cumbersome, because of going to and fro, scanning to determine prices before one goes to the Pay point.  Not determining the price before going to the Pay point may cause a lot of embarrassment,” Miss Mercy Onwuka lamented.

    “Apart from this development making things difficult for shoppers, I believe that the supermarket will be losing out on sales also because some shoppers on a budget will not have the patience to scan all they would have wanted to buy so they just pick a few things and leave,” noted Onwuka.

    It is the same story at the imposing Twin Faja Supermarket, located along Iyana Oba Road near the Lagos State University [LASU] main campus Ojo. While some prices are displayed on the shelves, others are not.

    Students who majorly patronize this supermarket are having a hard time shopping in the supermarket. According to Ngozi Nwankwo, one has to make trips to the Pay point to determine the price of products before one can now decide whether to buy or not considering the amount of money in one’s pocket

     At ‘Price Right’ Supermarket in Lekki Phase One, popular for stocking up high-quality UK goods, the prices on the shelves were all taken down in February this year as the management complained about the ever-changing prices of goods.

    According to one of the supermarket managers who pleaded anonymity, “You cannot imagine how the prices of goods change. Today you are buying at N100, before the end of that day, the price has jumped to N150. There is no way those in charge of the shelf prices can keep up with that.

    “We are really sorry if our customers are experiencing difficulties but that’s the best we can do. At least we installed scanners at the end of each shelf. We want our customers to have a lasting enjoyable shopping experience and we are sorry if the current situation is making things cumbersome for them.”

    This situation is not restricted to supermarkets in Lagos alone, information from other states revealed that the majority of the supermarkets have tactfully removed most of the shelf prices. Highbrow Roban Stores in Enugu, whose products are mostly imported from the UK, display most of their goods without price tag on shelves. The story is the same in Port Harcourt, capital of Rivers State.

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    However, the first-tier supermarkets like Shoprite, Spar still have prices displayed on the shelves except when the workers in charge lag behind on their duties as explained by Mr. Haresh Keswani, the Group Managing Director SPAR Nigeria during an engagement between FCCPC and the National Association of Supermarket  Operators of Nigeria[NASSON] and other stakeholders.

    Nigeria is an import-dependent economy and Nigerian importers are purchasing goods at prices that are already very high abroad. The cost of these goods keeps fluctuating  because of higher tariffs caused by the depreciation of the naira which also is not stable.

    It will be recalled that in April this year, the  Lagos State Consumer Protection Agency directed supermarkets and grocery stores in the state to display prices on their products.

    The agency warned that stores that don’t follow the law risk being fined or shut down. This was disclosed in a statement posted on the official website of the Lagos State Government.

    The statement read, “The Lagos State Consumer Protection Agency has issued a stern warning to supermarkets and grocery stores within the state regarding the non-disclosure of price tags on products.”

     Also in February, In February, the Federal Competition and Consumer Protection Commission[FCCPC] sealed a popular supermarket in the Garki Area of Abuja, Sahad Store, for lack of transparency in the way it fixed prices for products.

    However, Barrister Joe Lekan, a Public analyst and a stakeholder in the supermarket chain explained that the supermarkets are not hiding their prices or out to cheat consumers, “It is difficult to change the shelf prices almost every day as prices are continuously changing on a daily basis.

    “The majority of those supermarkets still have price scanners conspicuously positioned in different parts of the supermarket,” concluded Joe Lekan.

  • LASCOPA evacuates expired products from supermarkets

    Lagos State Consumer Protection Agency (LASCOPA) has embarked on evacuation of expired products from supermarkets as part of efforts to guarantee the safety of consumers in Lagos from all forms of unwholesome products.

    Expired products were removed from the shelves of multi-chain stores in Magodo G.R.A and along Mobolaji Johnson Way, Alausa, Ikeja, during a routine monitoring exercise of LASCOPA.

    According to the General Manager of the Agency, Mrs. Kemi Olugbode, the expired products were immediately evacuated from the supermarkets so as to ensure they are not further displayed and sold to consumers, adding that the unwholesome products would be destroyed.

    She said that compliance notices were issued pursuant to the provision of section 4(a) of the Consumer Protection Agency law with a view to protect against the marketing of goods which are hazardous to life

    Continuing, she said that the agency observed that some traders in the local markets, shops, retail outlets supermarkets and even the multi chain stores are taking advantage of the festive period to sell unwholesome products at ridiculously low prices to consumers.

    She stressed that the agency will not relent in the actualisation of its mandate to ensure that consumers in Lagos State are protected and get value for their money.

    The agency further reiterated the need for consumers to develop a culture of patiently checking the details on every product, particularly consumables before making purchases.

    The GM therefore urged Lagosians not to hesitate to forward complaints to the agency on any unwholesome product displayed for sale in any shop or when their rights as consumers are infringed.

     

     

     

     

  • Ibadan supermarkets woo customers

    Shopping is getting more structured in Ibadan, the Oyo State Capital as supermarkets increase, offering superior services to roadside shops. Southwest Bureau Chief, BISI OLADELE, writes on four of the topmost supermarkets in the city, using price to guide shoppers into getting the best value.

    Billboard, radio and television advertisements are gradually becoming the norm for the few top supermarkets in Ibadan, the Oyo State capital as they grow in size and number. The competition is forcing them to also offer mouth-watering promotions, loyalty programmes and other incentives to woo customers.

    In all of these, quality of service, availability of varieties and price play a huge role in gaining a larger percentage of the market. Also among the above factors, price advantage ranks high in determining patronage as shoppers struggle to achieve more with little funds.

    For this reason, the big stores pitch “low prices” as their unique selling propositions. Yet, many shoppers are unable to zero down on which is best for what product in terms of price.

    An online newspaper, newspeakonline.com, in its recent price survey on four leading supermarkets in the city, showed Feedwell as the overall best in terms of prices.

    Other supermarkets considered in the price survey are Foodco, Shoprite and Grandex. The four supermarkets have branches across the city but prices of their wares vary. The survey focused on popular daily beverages, food items, drinks and baby products.

    According to the medium, the items shoppers mostly visit stores for, on a daily, weekly and monthly basis, include Johnnie walker red label wine700 (ml), Hennessy cognac vs 700(ml), Baileys Irish ice cream, Chamdor Non- Alcoholic wine, J&W premium Non-alcoholic wine, Molfix baby diapers (small), Pampers baby diapers (small), Nestle Cerelac baby food, Sunlight detergent 900g, Bounty Chocolate, Snickers chocolate, Mars Chocolate, Lipton tea bag, Nestle milo (500g) refill, Golden Morn 500g, Tom-tom all flavours , Heinz tomato ketchup 300g, Heinz salad cream 285g, Titus sardine, Ola-ola Poundo yam flour(1kg ), Golden penny Semovita (1kg), Close-up deep action toothpaste, Nivea roll on, Pringles big all flavours, Easy on spray starch, Jacobs cream crackers, Mcvities short bread, Nasco cornflakes 500(g).

    Judging by the above table, Feedwell offers lowest prices in the candies and items such as chocolates, biscuits, wine and liquors. The table shows that the store has lower prices for products like the small packs of Molfix and Pampers baby diapers as well as Nestle Cerelac baby food.

    For those wanting beverages, Feedwell and Shoprite look cool considering the fact that Nestle Milo and Peak milk are at their lowest prices at these stores. The price of Hienz salad cream is even too attractive to ignore at N625 compared with the price others offer.

    Though prices of items may be a bit higher in other supermarkets, they have their strengths in other areas which include proximity, ambience of the stores and parking advantage.

    While Shoprite has an ambience that attracts shoppers, a walk into Grandex Supermarket offers some other rich experience which some shoppers may enjoy, and which they may not find in other stores. Foodco’s restaurant is well liked by shoppers while it also offers regular promotions.

    As we start another weekend, shoppers in Ibadan would be happy to make informed decisions with our guide.

     

     

  • Rise and rise of supermarkets

    Rise and rise of supermarkets

    Bukola Afolabi in this report writes on the boom in supermarkets and other related sales and marketing outlets across the major cities in the country

    IT is anybody’s guess how and what has led to the boom in supermarkets in recent times as virtually every alley and street you visit these days, you find shops and many retail outlets offering all kinds of items for sale.

    Currently, most people, especially the emerging middle-class in the country, patronise the modern grocery stores which were until recently considered to be exclusively for the elite. Though these international retail shops showed stiff preference to stocking of foreign foods some years ago, increased demand by Nigerians for locally-produced foods, particularly those with no equivalent imported ones, is changing the trend.

    Nigeria’s growing number of foreign and local megastores are taking more stock from local farmers and processors, departing from the former practice of stocking almost exclusively imported foods.

    Fast moving consumer goods companies are keen about the future of retail business in the country. Nigeria’s slowly but steadily growing retail sector is adapting to the demands of consumers. And the expanding presence of local and foreign malls across the country shows these consumers are not all in Lagos.

    Lagos, always opened to business, is the obvious first port of call for retail companies. The state wants to alleviate poverty and promote sustainable economic development by focusing on power generation, agro-allied businesses, intermodal transportation and housing. A cluster for small to medium scale enterprises and two allied parks are underway.

    For foreign malls, thinning margins in the developed economies coupled with slow economic growth has made the search for new markets imperative. Nigeria and Morocco, according to Accenture, have drawn the attention of retail giants like Walmart. Kenya, based on the Nielsen Emerging Markets Insight, has the highest penetration of modern retail channels Africa’s growth isn’t driven by oil and copper alone.

    Accenture estimates that by 2020 Nigeria’s expenditure on non-durable goods will be N13 trillion naira; the agriculture, financial and real estate sectors are expected to be beneficiaries as capital accumulates and the retail sector evolves. Inadequate logistic; limited access to credit, for micro businesses and the slow adoption of online payment may delay this evolution, but it won’t stall the emergence of multiples of local and foreign retail businesses.

    According to McKinsey, several trends are driving retail penetration on the continent. A young optimistic emerging middle class based in 50 urban areas across the continent are demanding well priced consumer products that are of good quality.

    Though television and word of mouth are the greatest influences, the media habits of African consumers are changing. They are accessing the internet via ubiquitous mobile phones. McKinsey warns that businesses looking to expand into Africa must mind the gap: Africans have distinct and regional differences.

    Accenture says these changing habits have led to three mega trends: the polarised, expectant, inter-connected consumer. As a result, retail businesses will have to learn to differentiate, explore reaching consumers via multi-channel advertisement and distribution outlets, and match consumer expectations.

    The Nation gathered that locally-grown and processed foods on the shelves of the megastores have increased by about 50 percent in the last two years. Industry watchers say this is due to increasing demand by Nigeria’s growing middle class who are motivated by aspirational shopping habits and health concerns.

    Edobong Akpabio, chief executive, Visionage Agrotech Farm, attributed this to the higher prices of locally-produced foods and the non-existence of foods such as locally-produced and packaged sweet corns and canned potato chips, as well as the high cost of infrastructure, especially power.

    Due to outcry by local producers, many leading retail shops in the country now also stock locally-produced foodstuffs such as tomatoes, onions, cucumber, cabbage and carrots which were still being imported into the country about two years ago.

    Ernest Onoja, manager, Favour Foods, said even though he had been involved in the processing and supply of local foodstuffs for several years, it was in the last two years that there was mass acceptance by retail shops in Nigeria. “That was after we improved on the packaging,” he said.

    Nnamdi Anakwe of Foramifera Market research also agreed that the marked improvement in packaging of traditional Nigerian foods has made them acceptable by both foreign and locally-owned retail shops.

     “It was difficult convincing retailers to have my product on their shelves, probably because the product is not popular. Dried mushrooms are rarely available in the market here. You commonly get the imported ones in cans. Some of the supermarkets are so sceptical that they demand assurance from regulatory bodies such as the National Agency for Food and Drugs Administration and Control (NAFDAC),” said Chiamaka Uzendu, producer of dried mushrooms, who started her business about a year ago and has not been supplying to any supermarket until recently.

  • Supermarkets’ bargain tactics: who bears the loss?

    Supermarkets’ bargain tactics: who bears the loss?

    Shoppers are often deceived by the seemingly endless succession of rollbacks and extra free deals adorning supermarket shelves, trusting these supermarkets to help them save money. But the sincerity of these deals could be questionable, reports, TONIA ‘DIYAN

    It has become a usual practice that at this time of the year, discount prices on goods online and offline become the order of the day with shoppers scrambling for significant discounts on immediate buying because of the deal offers available.

    Asked if special offers are designed to provide the average shopper with good value or it is a mere bargain tactics for supermarkets, Femi Oluyole, a banker who was buying groceries from a supermarket in Anthony-Lagos thinks supermarket pricing policy is designed to increase margins primarily through convincing their ‘loyal’ customers into buying bargains that are not sincere bargains’.

    Adding that he finds it very confusing and time-wasting trying to work out which products are included in any offer, which is often not clear to him’. Oluyole said he noticed that in the home bake section of the store, there is a promotion to buy three items for the price of two. He also noticed a shelf full of items priced at only N15 each instead of their normal price of N50 per one.

    At Justrite Supermarket in Abule-Egba and Iyana-Ipaja, a shopper, Sholape Moyosore noticed that baking potatoes in a four pack which she uses for her baking as a caterer, all medium sized potatoes are charged at a premium price. She said: “I always understood a baking potato to be sold according to their sizes but the reverse is the case here.”

    She said also bought some grocery items from the supermarket for a certain price, but when she went back a few days later to buy more, the price had risen quite significantly. “When my husband queried this, he was told by an assistant (as if he was doing him a favour) to come back at the weekend as there would be a 20 per cent discount because of promotion. There was indeed, but the 20 per cent off still left the price far higher than when we had purchased the item originally. All this happened within the space of one week.”

    An elderly man, Pa Oluwole who has lived 40 years of his life in the United States, said he could not trust supermarkets because they are always saying they have the interest of their customers at heart when indeed, they are just out there to milk them.

    He said:  “Why should I trust supermarkets when they are always shouting about how they have the interest of their customers at heart? But I know how well they tell lies with their attractive offers. My daughter now shops for me at other outlets such as markets and small independent shops where many items are in fact cheaper and often better quality.”

    When price slashing and discount offers first became popular; supermarkets took advantage of what they saw as a veritable source of publicity and an opportunity to attract more customers. But, as the industry is growing and they are trying their hands in the marketing strategy, they say it has turned out that the deals weren’t offering the anticipated returns on investment.

    They often put attractive gift items on display as a bait to grab the shopper’s attention as soon as he walks into the store.

    All essential items are widely dispersed throughout the store. This is so that other ‘non-essential’ items can catch the shopper’s eyes as he walks around. He is being encouraged to spend more money.

    George Ukwunna is the Branch Manager of the Apapa Shoprite store. When The Nation Shopping met him to find out if the special offers which his store gives out on a daily basis are designed to provide the average shopper with good value for their money or if they are mere supermarket bargain tactics, he said: “Special offers are definitely designed to give customers value for their money.”

    He illustrated his belief by saying when a shopper buys an item at 20 per cent reduced cost from its market value, it gives him/her an opportunity to stock up while the offer last. According to him, the shopper will be able to save money by shopping at a well discounted price.

    A lady who simply identified herself as Rita said giving discount is another publicity stunt. Rita, who is the store manager for PEP, said because the store aims at getting publicity because they are new in the market, they have often introduced aggressive mark downs and promotions. She however said, “If it is all about the profit and not the customer’s satisfaction, the store won’t have an exchange policy. In other words, the customer is our priority and everything we do here, is at their interest.”

    The Nation Shopping gathered from a source that some supermarkets within the Lagos metropolis have decided to minimise, but not stop their price slashing strategy, saying the strategy may not actually be such a great thing for them after all. They have also realised that they are offering discounts against their best interests and may not actually present such inviting offers all the time.

    But, for the few customers, who visit after enjoying discounts, these supermarkets might decide that the idea is a bad deal and begin to turn their backs on it.

    Our source said it is only about three per cent of supermarkets which offer deals daily, weekly and monthly that end up sustaining their additional customers. Those who offer huge discounts and don’t retain their customers sometimes end up with low profits, loss of the initial patronage or no gain from the deals.

    However, some experts have said, bargains are not always what they appear to be. “For example, one customer picked up a 12-pack of toilet paper advertised as 30 per cent off. However, on closer inspection this was one of the more expensive packs on offer.”

    Speaking on the way forward for pricing and special offers, the Consumer Protection Council (CPC) has said it is calling on supermarkets to make their pricing clearer.

    CPC said: “We want them to show clear unit pricing – the price by weight, volume or unit – so that people can easily compare what they’re buying. We’re also putting pressure on them to sort out special offers so that they’re exactly that special which they are.

    “Last time we went round supermarkets with a trading standards officer and found lots of items that were over price in the name of promotional discounts and aggressive mark downs.

    “In some cases, products were listed as higher than they actually were. A 150g of detergent costing N300 was priced at N450. A 125g toilet cleaner for N350 was displayed as costing N500 for a bottle.

    “We checked the price per kilo, per 100g or per 100ml on a couple of products – looking at types of foods where errors have been spotted in the past. We found a quarter were wrong. In some of those cases, trying to buy the ‘cheaper’ product according to the unit prices displayed would have led to a consumer actually buying a more expensive item.”

    Advising shoppers, an expert says: “it is wise to check the price of individual items to see how much one will really save before purchasing”.

    He said products on the shelves at eye level are usually the most expensive items available. The supermarket’s own brand and economy items (cheaper products) are likely to be on the bottom shelf.

    For him, shelf labels make it hard for people to compare what offers the best value. By looking up on metric measurements, one can check different products and compare the price per weight/volume to see which products give the best value.

    Advising people to note that supermarkets have all their magazines stacked up by the counter, the expert said, they are strategically placed to give the shopper something to do whilst he/she queues up to pay for items.

    Other experts have said bargains are not always what they appear to be. “For example, when a customer picks up a 12 pack of toilet paper advertised as 30 percent off and takes a closer inspection at the item it will actually be one of the more expensive packs on offer.”

    Also advising parties involved, the Chief Executive Officer of Supermart, Mr Raphael Afaedor said::”If merchants are running deals, they should offer reasonable discounts that will still allow them earn profit at the end of it all.”

    He dded that customers, who are taking advantage of discount offers, should keep in mind that the goal of the supermarket is to make money, so sometimes; the offers might not be quite as great as the customer is hoping it will be.

    “The offer might be on products that a merchant wants to get rid off in order to accommodate new ones, or it might simply not be a really great discount.”

    Raphael, however, advised consumers should endeavour to carry out independent researches and confirm prices and product reviews before they jump on making a purchase offered as a discount sale.

    Having said all these, while price slashing, mark downs and promotions turn out to be bad business for many, there are still some supermarkets and shoppers who will make it available always or go for it when they go out shopping. Particularly at times like this when so many people do their shopping. Some merchants give out discounts on varieties of items they display daily and some shoppers will only visit such stores with discount offers.

     

  • Price war in supermarkets

    Price war in supermarkets

    Grocers are rolling up their sleeves, bringing aggressive discounts that will be of benefit to consumers. But how cheap are these discounts? TONIA ‘DIYAN asks.

    In a recent survey of food retailers in Shoprite and Spar stores, nearly three- quarter of people spoken to said they’ve increased their promotions in an effort to adjust to the needs of consumers and redirect them to branded products.

    Much of the aggressive discounting is focused on staple products such as cereal, milk, egg, yogurt, frozen foods, pastries, canned products, and items sealed in sachets and so on .

    Half of the retailers said they would ensure that the heightened level of promotions and price reductions last for sometime.

    Although grocers operate on fairly slim profit margins, they said they’re able to offer aggressive discounts because consumers typically buy regular-priced items.

    Sometimes, retailers also offer bundled deals, with this, consumers buy an item from one department in a particular store  and get another item in a different department in the same store, but at a discount.

    Yesterday, a shopper Nnena Agu  was pleasantly surprised that the N3,960 she spent at Shoprite bought her more items than she expected.

    She said, in addition to getting low prices, she picked flyers and hand bills from competing chains to compare  prices just to get the best discounts that stores are offering. “I notice that grocery stores have dropped their prices and I think they are doing the right thing especially now that there is fuel scarcity. It will help many of us cope.

    The Manager, The Bazaar, Mr. Femi Johnson said: “Consumers are approaching shopping more aggressively now by searching more for promotions, sales and doing less impulse buys. That is why we’re trying to be as innovative as we can based on what our customers want and need.”

    The aggressive discounts going on in grocery stores have also resulted in competition among them.

    The last two months have witnessed more 2-for-N10,000 deals at Spar in Victoria Island , more buy-one-get-one-free offers at Shoprite  and more price-roll back signs at The Bazaar in Illupeju, Lagos.

    That’s because grocers are ramping up sales and special promotions in an effort to out-discount one another — and earn the loyalty of cash-strapped consumers.

    In fact, a huge percentage  of everything sold by the Nigerian food merchants since the beginning of this year has been on sale, according to the Artee group.

    The discounting comes amid tough times for consumers and in an environment in which food suppliers and manufacturers continue to raise prices.

    “The volatility in food prices and the overall decline in consumer spending have created more intense competition among grocers,” said Mrs. Debola Majekodunmi, a grocery analyst and pioneer Centre Manager of the New Leisure Mall in Surulere- Lagos.

    “Also, it has triggered the strong uptick in promotions as grocers fight to respond to consumers’ desire for greater value. Such promotions might become permanently ingrained in consumers’ expectations”, she said.

    “Retailers are resorting to all kinds of ways to dramatize the savings they offer because  majority of people are more sensitive to looking for savings,” Shlome Anaga, manager Mega Plaza said. “It has become clear that a promotional price breaks through the clutter, and it works.”

    Shoprite  is an aggressive discounter. The chain “owes it to our customers to constantly challenge our promotions and to offer the best possible deals,” spokesperson, Linus Aguocha  said.

    He noted that the store is offering two laughing cow cheese spread for the price of one amongst many other offers.

    “Due to the present situation of the country, our two for the price of one  sales are extremely beneficial,” he said, adding: “Our customers say they love it and we’ll continue to do what we know how to do best.”

    Also, to become the most patronised, grocery stores are sticking with price slashing and discount  sales strategy. Ordinarily, one would have expected that discounts are given only during festivities. The interesting thing is that the big names in the grocery industry are those who have chosen this strategy to remain at the top.

    These grocers  have  said they won’t only be selling discounted items, but will also  see that prices of grocery items are stable, saying it is  a way of scoring points against competitors apart from it being a way to drive sales.

    Findings show that since the year began, Shoprite is generally the cheapest with an average of about three per cent, followed by Spar, then The Bazaar, in Illupeju and Grocery Bazaar in Iba.

    However,  behavioural economists say promotions have a huge effect on the consumer. And that more than 40 per cent of groceries are bought on special offer, so regardless of what’s on a shopping list, the consumer  ends up buying  items on special offers.

    That means what the customer buys is always cheaper, or at least, not much more expensive than it would have been elsewhere.

    According to players in the industry, promotions appear more about point scoring against competitors than engaging with customers and their needs.

    Therefore, they work very hard to monitor what their competitors are doing. Some  get data for price guarantee on everything from online comparisons to actually sending people into competitors’ stores to look at prices and to write down the details of all the offers.

    With three of the big four, it is easy enough to get basic pricing figures, because they have websites with many of their prices to allow people to order home deliveries.