tesco reducing prices..good or bad?

S

samanthajane

Registered User
Messages
766
surprised there not already a discussion about this. ( unless i'm blind )

What do we all think about today's announment that tesco is to lower the prices by 1/5, but only the stores close to the border?

For me personally it wont make a difference i'll still go to sainsburys in newry for my shopping .

Shopping in dunnes.... €139.46, 29/04. I was able to carry this shopping home, myself and the bf, we had 2 bags to carry each.

Shopping in sainsburys... £155.44, 05/05. Filled the boot of my car.
 

I don't get the logic of your posting.

Are you saying that the Dunnes and Sainsbury prices are more or less the same for you (after currency diffferences) and that you won't be going to Tesco, even after the 20% discount, because you don't want to?
 
No totally the opposite. What i got in sainsburys was twice the amount i got in dunnes, i only went to dunnes that day because i couldn't get up to newry to do my weekly shopping. 4 bags compared to a whole boot full is a lot of difference. Even with tesco cutting their prices they still wont be cheaper than sainsburys. My opinion of the tesco stores doing this is to try and get the people that are going to newry to go to them instead, and i'm saying it still wouldn't be worth it, you can still save more by going to newry.

So what i was trying to say ( not well put i admit ) was would people go to tesco in dundalk instead of carrying on to newry, or even go from dublin to dundalk to get the discounts at that tesco, because their local tesco would still be the same price. Is it a good thing doing this to try and stop people going to newry, or a bad thing because it's only certain stores that will be lowering their prices.
 
Or are you saying the Dunnes have bigger bags.

Seriously though, does reducing prices in the border regions, not just shift the problem from the border regions to the midlands as these people shop in the border regions now.
 
I suppose the concern I have is the tesco have announced they will not be sourcing international brands from Irish suppliers.

Over the years companies like Unilever, danone have set up here and it is these distributers and warehouse specialists that will be hugely affected.

Mr Bear works in this industry and I think I have posted this before - Tescos profit margin on the products that are supplied by Mr. Bears company are 30-40% - where are in the UK and NI their profit margin is 8-10%....

P..
 
samanthajane said:
Shopping in dunnes.... €139.46, 29/04.

Shopping in sainsburys... £155.44, 05/05.
....
What i got in sainsburys was twice the amount i got in dunnes
Click to expand...

So let me get this right samanthajane - you paid short of €140 in Dunnes locally as opposed to just over €175 in Newry and got twice as much goods in Newry. Factor in the cost of petrol (say around €25 for the round trip) that works out at about €80 euro saving for a trip that probably takes you around 3 hours? Is it really worth this? Could you not look at shopping in Lidl or Aldi locally instead? Firstly you would save at least 2.5 hours in your day, secondly you would be supporting the economy here, and thirdly I would expect (if our experience is anything to go by) your bill to save at least 20% on the Dunnes prices - so what would cost €280 in Dunnes would cost only maybe around €200 in Lidl/Aldi. I really don't get this idea of a 125 odd mile round trip just to do your weekly shopping!
 
pinkyBear said:
Mr Bear works in this industry and I think I have posted this before - Tescos profit margin on the products that are supplied by Mr. Bears company are 30-40% - where are in the UK and NI their profit margin is 8-10%....
P..
Click to expand...

These figures are shocking. But one of the reasons that Tesco got away with this was because our home grown supermarkets were chalking up similiar prices. Take Dunnes 'because we're Irish' slogan ........ that could be interpreted as 'because I want to put more dosh in Ms Heffernan's already bulging purse'. How come they disn't start dropping their prices 'til foreign retailers saw the glaring differentials and moved in? Can Dermott Jewel of the Consumers Association not highlight this, if he is aware?
 
Obviously I can't argue with your figures as you've got the inside track but from the outside - Tesco source from UK distibutors and are suddenly able to to take 22%(?) off their prices. Dunnes et all stay with the Irish distributors and still charge that 22% (studies showed all major stores charged more or less the same before). Aldi and Lidl source from their European distibutors and can undercut the entire Irish market.

Somewhere along the line doing business through Irish companies just isn't cost effective. Whether that's through high margins, inefficiences of scale and work practices, or other high costs for the Irish companies that they have to feed through isn't obvious. Probably a combination. But I find it hard to complain about any company that reduces it's costs and passes those savings on to their customers.
 
Hi there,
You must remember Tesco do not publish profits, neither do Dunnes and I can confirm the prfit margin they have on the product Mr. Bears company supply.

There is another difference - in the UK there is much more agressive competition - you have asda, sainsburys, tesco, morrisons and dunnes in the north.

In ROI our supermarkets are much smaller in comparison - Dunnes while big in the south have very small impack in the UK, superquin and supervalue...

Would their buying power for a population be as great as a company who are buying for a population of 60 million...
 


So if it was problems with distribution - why is Tescos own barnd stuff is cheaper up north?
 
why is Tescos own barnd stuff is cheaper up north
Click to expand...
- I cant speak for their own products - but their margins on certain brands is higher in ROI as I stated before..
 
cork said:
So if it was problems with distribution - why is Tescos own barnd stuff is cheaper up north?
Click to expand...

Primarily higher margins I'd imagine. Until recently the Irish market wasn't price sensitve. I'm not defending them but that's the reality of running any business. You charge what the market will bear. If you can cut costs without affecting your margin that's what you do.

Other costs (rent, energy, wages insurance, rates) probably account for the rest.
 

Simeon I completely agree with you here - basically I think what happened was before Tescos arrived there was a nice cartel - nice margins (sterling high).. instead of challenging this - they too fell into our line of profiteering...
 


My situation is a bit different from most people. As you can see from my location i'm split between newry and dublin, so the petrol and time costs dont factor in because i have to make that journey anyway ( i drive a peugeot 206cc 1.6, if i was to factor in the cost the petrol would only be around €15, ) Also i dont have to change over my money so i dont lose out there i use my english debit/credit cards.

So for me yes it is totally worth it. just one example in dunnes a bunch of 6 banana's €1.67, sainsburys bunch of 6 banana's ( approx same size ) 75p. I could sit here and go through both shopping reciepts and give loads more of these examples.

What i got in dunnes was every day items milk, bread, sandwich fillers, drinks ect ect and it wouldn't last us more than 3-4 days. The shop from newry will last the whole week, if not more. Next week when i go up i wont get as much from sainsburys and i'll go and do a freezer shop in iceland, i cant do both at once i dont have enough room in my car.

I'm all for shopping local when i can afford to do so. Only a few days ago i went to enquire on prices to get a new kitchen ( will be about a year before we can afford to get the new kitchen but i wanted a rough idea of how much the kitchen i wanted would be ) i noticed they did a small range of fridge freezers, cookers ect, the sales man told me i would be better off buying them in the north and it would be so much cheaper. Not sure what to make of this?!?! Maybe by saving on buying them up north i have more to spend on the actual kitchen with them, maybe they were going to stop selling the fridges and cookers and knew that in a years time when we hope to do this they wont even be stocking them anyone.

Even if i didn't have to do the trip to newry i would still go there to get my shopping because for me it works out cheaper every time. And not just for food shopping either for all the other little bits and pieces you might want to pick up.

If i can get it in Ireland for the same price then of course i wouldn't have to go else where and i would shop local. Untill that day comes i will continue to go where the prices are cheaper. It's all well and good saying to support the country but i have a family to support and for me they will come first each and every time. All these savings means i have the money for them to do activities, to take them to the cinema every now and then, and all these are local. I may be taking away from the country buying shopping in newry but by doing so i have the money to put back into other area's.
 

Not to defend Tesco, but the moving to UK distributors makes sense. The problem is that the cost price of goods from multi nationals and big brands is set higher in Ireland. Because it's a very small consumer market compared to the likes of UK, we get stuck with higher cost prices before any of the other issues are taken into account.

Larger market in the UK means companies are able to negotiate a cheaper cost price.

While Unilever etc may well suffer, they're as much part of the problem as the supermarkets. It's them who set the higher initial price before they even arrive at the shops.
 
Hi there,
While your agruement does merit sense, the problem would be if sterling was high - that is why alot of these companies moved to Ireland as it was cheaper than sourcing from the UK..

If / When sterling rises - we would be crucified if everything was being sourced from the UK..

While Unilever etc may well suffer, they're as much part of the problem as the supermarkets. It's them who set the higher initial price before they even arrive at the shops.
Click to expand...
- can you be sure about that!
 

The difference in cost price is enough that while there's been movement in the sterling/dollar price, it makes no difference. The multi-nationals set a price and because Ireland just isn't a big enough consumer market the retailers here do not have the power to get a better deal as their UK or other European counterparts.

I'm not saying this is the only problem, but, perhaps, the start of it. You're looking at a very limited market in terms of size compared to the whole of the UK and so stock is generally ordered on a lower scale, hence less bulk buying discounts.

Tesco moving to UK distributors gets them the lower price for a 60 million population.
 
Here's a good one, our local Tesco has ladies casual summer trousers ( the ones the cut off above the ankle )for E10. But you can get the same trousers + a t-shirt for a total of E8. ! My wife was getting the trousers and the girl on the checkout said why was she not getting the t-shirt as it was cheaper for the two. So of course she went back for the t-shirt.
 
You must log in or register to reply here.
Menu
Log in
Register