Supermarket pricing: leave the people alone!

One of the most dangerous political trends today is the view, gaining ground among some sections of society, that we need to be protected from ourselves. It is this belief that underpins the call for minimum alcohol pricing, the lobbying for a tax on sugar, and the legislation forcing retailers to hide tobacco behind closed doors.

The same worldview is evident in today’s assertion that consumers are seemingly incapable of making informed choices when it comes to deciding which supermarket bargains to put in their baskets. The big grocers, it is said, are ripping people off. They are making offers too confusing, are making it hard to compare prices, and are using deals to persuade consumers to spend more.

The last claim is particularly revealing, not least because it strikes at the very heart of what all of retail is about. What business doesn’t want to entice consumers to buy their products or to spend more? The whole of the industry, from marketing to advertising to packaging to the layout of stores, is geared up to stimulate shoppers into spending.

That retailers act in this way is entirely unproblematic. Why? Because, ultimately, they do not force anyone into buying. That decision rests solely with the consumer. Shoppers ultimately have a choice of which supermarket to use, what brands they select, what bargains they snag or leave on the shelf, and how much they spend. And given the turbulent state of the grocery industry, it is clear that shoppers are adept at exercising that choice.

The mistake of those who advocate action is to confuse persuasion with force. This is dangerous ground, both legally and ethically. If trying to get people to spend is to be held as the psychological equivalent of holding a gun to someone’s head, then every business and indeed most individuals are guilty.

Yet the difference between the two is as obvious as it is stark. Tesco tries to persuade you to spend; if you don’t want to then nothing happens. HMRC forces you to pay taxes; if you don’t want to then, ultimately, you end up in prison. The two simply cannot be conflated.

Perhaps grocers should be a little less persuasive, a little less aggressive with price promotions. Perhaps. But how is this to be measured? Where is the line to be drawn? There is no clear objective answer. That means there can be no clear objective law. And non-objective law, where parties never quite know whether they are doing right or wrong, is bad and unjust law.

While the charge of enticing shoppers into buying is clearly a nonsense, what of the other claims? Are the offers misleading? Are they confusing? Sure, they can be. Supermarket pricing is dynamic and fluid: prices across the thousands of lines go up and down on a daily basis; offers come and offers go.

This does make it hard to keep track of prices, but it also means that savvy shoppers can get genuine bargains and it likely results in an all round better deal for the consumer. Given that price inflation in grocery has been painfully low or negative for the past few years, it is evident that the competitive dynamic is alive and well in the industry. Lessen the ability of the grocers to flex pricing and it’s likely that over the long run the consumer will end up paying more.

As true as all of this is, it would be wrong not to admit that some supermarket pricing is illogical. Every shopper has seen the so called ‘deals’ where it is cheaper to buy two smaller packs instead of the larger ‘value’ pack, or something equally absurd. Occasionally this is the result of a genuine error, sometimes it is deliberate.

However, this is neither fraudulent nor is it immoral. As long as prices are clear, the consumer can, if they wish, make an assessment and an informed decision. The vast majority of supermarkets display unit pricing at shelf edge which makes this process easier. The information to make an educated choice is already there for anyone who wishes to use it.

That some shoppers do not wish to invest the time or effort in making such comparisons is their choice. It may be a silly choice or a choice that ends up costing them marginally more than a more considered approach, but it is their choice nonetheless. It is not the job of government to intervene and say that this approach is wrong and that consumers need to be protected from themselves.

A further small minority of shoppers may be incapable of making an informed decision, unable to undertake the basic maths required to draw comparisons of value between products. This is unfortunate, but the solution lies in better education not more regulation.

Perhaps the biggest irony in all of this is that attempts to iron out every bit of complexity and difficulty from life ultimately makes people less able to make choices for themselves. In a world where people are directed and spoon fed, there is simply less need to think.

The bottom line is that decisions around healthy eating, drinking responsibly, assessing prices, shopping and spending sensibly, and all manner of other similar functions are the personal responsibility of the individual, not of the state.