An Emerging Supermarket Cartel?

Today, the major supermarkets are all "price matching".

They are all deeply concerned about getting a good deal for us. They apparently want to ensure that down trodden grubby little Englanders like you and me can stretch their pennies as far as possible.

Yea right.

Look at this from a different angle.

Company X states that it will price match anything from Companies W,Y and Z. For the consumer this propaganda reads as "Shop with us, we are the nice guys at company X - if our prices are higher than elsewhere we'll take a hit and match prices.

Hmmmm... nice guys eh?

Now look at the hidden corporate Company to Company sub-text

"If you undercut us we will reduce our price to match yours.  It does not matter how you have reduced your price, we will match it. Even if it means we sell at a loss. Remember we are a huge company. Cause us too much pain and we will cause you an enormous amount of damage. But only if you try to out-compete us. Follow our pricing and keep within an acceptable limit then we can maintain an air of competition. We can all clean up.

But, if you want a price war we will will give you a war.

Who wants a war? Especially when it could cut profits.

Instead in practice we get this.

Company X tweaks a product price upwards slightly. So initially, they are more expensive than their peer group. When challenged, they price match. Consumers are conned into thinking this is because company X is being "competitive". Then the other companies, one by one, follow suite and up their price. We end up with a transparent price hike for no reason other than company X wants to increase it's profit margin.

Then it can all start again.

This scenario is an open cartel. Normally cartels are closed conspiracies. (i.e. companies secretly conspire to fix prices). In the above context the conspiracy is all done by innuendo and propaganda. But it is still a cartel.

Happy shopping - and watch out for those "good deals".

(apologies for the long absense - I have been otherwise engaged.)

Love & Kisses

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