Every month stores in South Africa spend millions of rands on sales promotion catalogues which display the marked-down prices of goods in the stores.
These catalogues are promoted online, stuffed into post boxes, and fall out of every newspaper bought. The practice is particularly common in household goods, with each chain running weekly or bi-weekly national and regional promotions to tempt shoppers.
Consumers in their turn feel secure in the knowledge that they are saving themselves and their families hundreds of rands by taking note of specials and religiously stocking up on them whenever they go shopping.
But just how much money are consumers saving by purchasing items marked down.
How special are specials?
Retail Price Watch, the independent consumer price comparison website, investigated Specials at different stores to determine the savings percentage.
“We examined the average price of certain household items at various chains for six weeks prior to the Special,” said Viccy Baker of Retail Price Watch.
“Pick n Pay had an advertised Special on Skip Intelligent FlexiBag 2kg in the two-week mid-August period, at R46.90. In the six weeks prior to the Special, the price at Pick n Pay was an average of R68.99, so the Special was at a 32% discount.
The average price at Shoprite, however, over the same six week period as Pick n Pay’s Special was priced at R63.49 – 9% cheaper.
At Checkers, it was R58.12 – 19% cheaper; and at Makro it was R55.95 – 23% cheaper than at Pick n Pay.
“Similarly Shoprite had a Special on Clover Long Life Milk 6 x 1l, at R69.99, a 16.5% discount on the average price in the six weeks prior to the Special, of R83.85. But at Pick n Pay, Checkers and Makro the ‘normal’ prices were all 3-5% below that of Shoprite over the six-week period.
|Special||Price in the six weeks prior to the special|
|Price in rands||Checkers||Makro||PnP||Shoprite|
|R46.90 from Pick n Pay||R58.12||R55.95||R68.99||R63.49|
|R21.90 from Pick n Pay||R25.58||R25.22||R20.77||R25.99|
|R69.99 from Shoprite||R79.45||R79.30||R81.26||R83.58|
“This is one tactic that retailers use to make shoppers believe they are getting genuine specials – in fact if they shop regularly at one chain they have already paid a higher price than the average in the weeks and months preceding the Special.
“Another tactic is to offer a product at a ‘Special’ price when in fact in the weeks preceding the promotion a number of their stores have actually been charging a lower price than the Special. The consumer ends up spending more on the Special than if he were paying the normal price,’ Baker said.
She noted that inn mid-August Pick n Pay offered Tastic 2kg rice at a Special price of R21.90. In fact, in July and early August, many Pick n Pays around the country were selling Tastic at under R20.
Are South Africans Specials junkies?
It is well documented that trade and consumer discounts set manufacturers and retailers at odds with each other and add to the overall cost (estimated at more than 2.5%) of the product.
“In a truly competitive arena, the chains would be outdoing each other to cut prices on the same products. Instead, we find that Specials are carefully orchestrated between one chain and the next, so that even when hundreds of items are being promoted, they are not the same as the hundreds that are being promoted that week by the other chains,” Baker said.
Sainsbury’s, the second largest chain in the UK, has been reducing the number of promotions it offers consumers and cutting the regular price of many healthy foods as a result, Baker said.
In an article in the Guardian on 4 August, Paul Mills-Hicks, the food commercial director of Sainsbury’s, said: “Since 2014, we’ve been working hard to remove promotions and invest money in regular lower prices. In doing so, we have made hundreds of fresh and healthy products affordable all of the time and our fresh produce sales are growing as a result.”
Baker urged consumers to be more savvy when it comes to weekly shopping.
“Most people who shop regularly have an idea of what a price should be. You can be pretty certain when an advertised promotion results in a massive price drop that you were being overcharged for that product before.”
“Shop for similar items and house brands and look for products which your own branch is promoting perhaps because it has an excess of stock. Avoid the advertised special – if you have the willpower.”
Viccy Baker is founder of Red Gekko’s Retail Price Watch, a consumer website dedicated to providing the latest up-to-date information on consumer good prices across South Africa. You can view and compare products on various prices here.