Saturday, 21 February 2015

What Lidl get right and Tesco seem to get very wrong...

If you'd not guessed from this blog already, I have become slightly obsessive in my comparisons between supermarkets. If you read the business pages of the newspapers, you'll realise I'm not the only one - it seems the British have stopped being brand loyal and price competition is key. This is why Lidl and Aldi are doing so well and the "Big Four" are doing so poorly.

In my spare time I do like to do a bit of armchair retail punditry, so to break up the reviews of Lidl products, I thought I'd offer some of my thoughts. 

It took me a while to become a Lidl shopper. I got my fingers burnt when they still imported a lot of their stock from Germany. My flatmate and I used to jokingly call all their products "zwolf minuten" pizza/lasagna/chips etc. as everything seemed to take zwolf minuten to cook. Our other local supermarket was a big Scotmid that was spectacularly bad at stock control (leading to the hilarious evening meal of avocado and mini sausage rolls one night). Then I lived next a Waitrose for a few years. When I moved back to Leith, Scotmid was still open, and we'd shop there or drive to ASDA, Tesco or Sainsbury's. Then Scotmid sold their store to Tesco and I got my clubcard and was sold, happily brand loyal, for a while. 

I'd pop into Lidl every now and then for their Thursday random shite, and occasionally pick up other things and be impressed with the quality. But what really turned me into a Lidl shopper was just a raging frustration with Tesco. This came to a head when I went to Tesco and had orange juice and Ariel washing liquid on the shopping list. The orange juice was £1.50 a litre, or three for £3. I put three in my basket. The Ariel was BOGOF. At this point I just stared at the price sticker on the shelf thinking "am I actually strong enough to carry five litres of liquid home?" At that point I thought, no, sorry Tesco, I want one litre of orange juice for £1. In fact, no I want 1.5 litres of orange juice for 98p from Lidl. I want my Ariel to be half price, not BOGOF. I don't want to buy three litres of the bloody stuff to carry home with me.

This confusion over prices is widely recognised by retail analysts as being what's driving away Tesco shoppers. And it is bloody annoying. You also regularly see them doing stupid things and cannabalising their own sales through their special offers - not as obvious as the pricing errors that make buying two cheaper than buying one, but subtle ways where if you think about it, because of their daft endless special offers, they must be reducing their own profits. 

Another Tesco thing that is now just annoying is Clubcard. The vouchers we get are absolutely pointless as they'll only give you money off things they don't make much profit on and these are invariably the things you rarely buy. The daft one we always get is 60p off the Guardian or the Observer, when we're subscribers so we pay using a pre-paid voucher so we'll never use it. But basically, I don't want to have to remember to use vouchers, I just want my shopping to be cheap. And the "price promise" vouchers - yeah, thanks for reminding me I could get cheaper shopping elsewhere. Similarly, I wanted to use some Clubcard vouchers to buy a Hudl from Tesco online. I thought the option to cash in the vouchers would come up when I got to the checkout as it would be automatically linked through. No. I had to log in to my Clubcard account, get the voucher codes, go back to Tesco online and cash them. I gave up in the end. Tesco lost an impulse sale of £150. My bad mood, not helped by a cold, was astounding. 

What I increasingly find unbelievable is how poorly Tesco use Clubcard. When they started it it made Tesco the killer company they became throughout the 90s - every little did help as they knew their customers more than anyone else. Comparing them to companies such as Google and Facebook now, they seem utterly clueless about their customers. If I were Tesco I wouldn't be selling the Clubcard bit of the business but investing billions in IT and turning it into something like a Google account - a full on knowing membership. Yes, shopping habits are changing, but I still bet the vast majority of Tesco shoppers do the same shop week-in, week-out. Your Clubcard should be linked to an app on your phone, or a check-in point in the store, that produces your weekly shopping list. This should be linked to their EPOS and stock-control system to maximise the savings (those damned coupons) that you could make that week and offer you live offers. These could flash up on the till at the checkout - offering you, say, 10p off orange juice now, or 30p off if you buy two litres on your next shop. Self-service checkouts could be linked to your account and remember that you always pay by card, defaulting to that option when you press the button to pay. At the most basic, the EPOS and Clubcard system should be able to tell that I pay for my newspaper every week with a voucher, and thus not send me coupons I can never use. 

I like Lidl because it's simple. I can trust it will be cheap, though it is occasionally undercut by Tesco on the price of branded goods. But I don't have to stand there in Lidl doing mental arithmetic to work out if it's cheaper for me to buy 700g of tomato ketchup, or 910g. Tesco should be able to do my shopping for me with their Clubcard data. Instead it's a confusing, frustrating, expensive experience. If they don't sort this out, then Clubcard will go the way of Green Shield stamps.

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