News is circulating around the retail circle that British big four supermarkets have finally decided to declare war on German supermarket discounters Aldi and Lidl that has been feasting on their lunch the past few years.
However, like most retail initiatives, instead of thinking of creative ways of confronting the threat, they opted for the only way they know how: price war.
Along with the introduction of a loyalty card, Morrison has also decided to introduce a price-matching scheme as it main strategy to take on the Germans.
The “Match & More” scheme will see shoppers get additional points if the price of their shop would have been cheaper elsewhere.
The “Match & More” is in addition to the supermarkets’ permanent low price scheme it introduced in May.
CEO Dalton Philips smilingly presented this outrageously thoughtless strategy as his brilliant plan for taking on the Germans.
Meanwhile, Morrison profit is already down by 51 per cent and like-for-like sales down by 7.4 per cent.
The idea of lowering price which will ultimately result in even lower profit seems ludicrous when the supermarket profit is already down.
However, that’s’ the only idea he and his management team can come up with.
The idea of actually finding the root cause of Aldi and Lidl’s rapid expansion does not occur to them.
Just in case he and his executive team is interested in discovering the core reason behind Aldi and Lidl rise, here it is: Aldi and Lidl are selling: made in Germany…quality products at reasonable price.
Aldi and Lidl customers do not shop in those supermarkets only because of price. If that was the case, they will shop at pound or 99p stores.
Aldi and Lidl can never be cheaper than the pound or 99p stores.
If that was really difficult for he and his executives to figure out, I have solved the puzzle for them…gratuit.
If he want my advice, he better figure out Aldi and Lidl very fast, because if he don’t he will be on the dole line sometime soon.
He need not take my word for it, let him as former Tesco boss Philip Clarke. He was moaning and groaning about Aldi and Lidl without sourcing them out quick enough to avoid being thrown into the shark tank.
This advice does not only apply to Mr. Philips. The bosses of the other three big supermarkets might want to pay attention to it too.
Especially new Tesco boss Dave Lewis and Sainsbury boss Mike Coupe.
A final word of caution for Mr. Philips, Mr. Lewis and Mr. Coupe, your supermarkets can never be cheaper than ASDA.
ASDA has the most efficient and ruthless supply chain the retail industry has ever seen. How do you propose to be cheaper than a business that has it prices built into it supply chain?
Any attempt to go on a price war with ASDA will be like signing a death wish.
There are ways that the big four supermarkets can take on the Germans and win.
As you will appreciate, I do not run a charity, therefore, I am not about to divulge that info for free.
If any of you guys are interested in knowing how, you know what to do.
Least I forget, I work on a first come first serve basis, so the first person to place the call will have my full attention.
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