The January Price Squeeze
Here it comes again…
Are you ready?
Patients have spent all their money at Christmas so they want the cheapest option they can find and often it’s now that suppliers put their prices up.
What that leaves in the middle is a bit like that room that Hans Solo, Luke Skywalker and Leia fall into in the very first Star Wars in the room where the walls are closing in.
These are the hardest times to stand your ground, when you’re trying to provide a quality brand and service: knowing that you have to stay up at the top of the price chain, not get sucked into the middle.
That means you enter into the supermarket battle and look what’s happening there.
Aldi and Lidl are winning because they only stock limited items, 4,000 instead of 30,000 in a normal supermarket. Their shops are smaller and they’re winning by stealing marketing share at the moment but they can’t do that forever.
The top end of the market is the farm shop or the farmer’s market. Totally different from the supermarket now and stealing from the top end of their prices because the supermarkets can’t replicate what they do because it’s just not the same.
In the middle is Tesco, Sainsbury’s, Asda, Waitrose and Morrison’s.
They’ve all stopped building shops (difficult to grow when you’re not building anything) and they’ve moved into the corner shop market place to try to do an Aldi to Aldi, but they can’t because they charge a lot more in the little Tesco Express than they do in the big shop (hadn’t you noticed that?)
They also only stock the premium items in these shops to make the most money.
If you’re running a business you get to decide where you stand.
The problem is that you have to stand there, believe it and turn up day after day. In the ‘January Price Squeeze’ that’s more difficult than ever.
Blog Post Number: 1881