K-Mart sucks as a retailer in my view. They are not alone, Big-W, Target and a couple of others are as bad. They can’t, don’t and won’t compete on service (despite sometimes advertising they do), the most important differentiator in retail, so they fall back and play on price. They use loss-leaders to pull in shoppers, hoping they purchase other items.
People buying on price are not loyal. If you are cheap today they will shop with you today. If someone else is cheaper tomorrow they will shop with them tomorrow. Discount shoppers are of little genuine value to retailers. They are expensive to attract and easy to lose.
Value is what brings people back. Value from information and customer service … an experience of personal value to the shopper.
Customers who shop with you because of the experience or because you have prodeucts others don’t have are more likely to shop with you again. They are more valuable if you price your goods well.
K-Mark is in my sights today because they are using price to disrupt a great Father’s Day opportunity. They have the 400g Toblerone King Dad Father’s Day gift at $5. Even allowing for a bulk purchase this is still a loss leader for them, a traffic generator. The people behind the product would have to be frustrated as the $5 price point devalues the wonderful product. Brand managers should realise this. Toblerone is a premium product people pay a premium price for because it’s worth it. K-Mart has turned it into any other chocolate bar.
We are sticking with our price plan as attract different shoppers to those you get in a K-Mart store. Also, our merchandising makes the product the hero. In K-Mart it’s a half-assed display, almost disrespectful. Shoppers in our store receive service unlike at K-Mart.
What I would love is suppliers to stand up to the disrespectful price tactics of the Coles and Woolworths groups. They damage respected brands and educate shoppers to not pay a fair price for good products.
Target has now matched Kmart in the latest catalogue…
It is a race to the bottom. First major retailer to give stuff away for free wins……..or loses!!!!!!
FoodWorks also has it on special at $5.99 from Monday. I would not be surprised if IGA has a similar promotion.
I doubt Toblerone would be that disappointed though. While their product is a ‘premium’ one, it is still aimed at the mass-market. It is not a high-end, low turnover product. It does not aim for exclusivity or target a niche market.
Idiots. They are giving away margin unnecessarily.
coles and woolies, idiots? i think not, i dont like them but dont think i could ever call them idiots. accc and politicians idiots ? – yes
If I had the scale of Coles and Woollies, i could and would run loss leaders too. As for the rest of us (the minority20%) we must use a different strategy. And happy to run the different strategy too.
I agree Mark. Loss leaders have their place in supermarket pricing strategy, but to use them for what is a seasonal, high-turnover, somewhat impluse-driven product does seem dumb.
Rick this particular product does not need to be discounted to this level to sell this week.
It also come back to different buy prices for different groups. eg I buy all my coke from Coles when they have a special as it is cheaper than my “wholesale” price. I do the same for choccies. I suggest if you sell Tobelrone you buy now while it is cheap and make the margin later.