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Supermarket profiteering has given way to PR game, for now

City Voices: You don’t think they’re cutting prices out of the goodness of their hearts, do you?

<p>The prices of everyday goods and services have soared in the past year (Jon Super/PA)</p>

The prices of everyday goods and services have soared in the past year (Jon Super/PA)

/ PA Wire
21 June 2023

n the boardrooms of Supermarketland they must have a phrase for it.

If not, how about having your Victoria sponge and eating it?

This is in reference to them taking advantage of inflation and the attendant doom and gloom to jack up their prices higher than… inflation.

Now, after a fuss has ensued and they’ve been outed as deployers of what critical politicians and the media are referring to as “greedflation” they’re lowering their prices.

They’re not doing it because they want to but probably because their PR and public affairs advisers have told them they must.

The message has gone out that carry on behaving like this and the grocers run the risk of Government intervention, MPs inquiries and implementation of some sort of price cap.

The prospect of being named and shamed on Question Time, of seeing their bosses wriggle in front of a select committee determined to make a point and cut them to shreds, of being ambushed on the Radio 4 Today programme when they only went on to talk about their thumping profits, store openings and community outreach projects, does not bear thinking about.

‘Quick,’ the retailers are saying, ‘get those prices down!’

It sticks in the craw, though, if you’re the grocery chain, to pull them right back. After all, punters were buying at those stratospheric levels. It goes against the multi-grain of everything they’ve been taught to be so generous.

The supermarket high-ups want to extract as much profit as they can, that’s what they took home from management school and all those away day mornings before hitting the golf course in the afternoons. So, they will chip at the prices of some products and slash others, and leave the remainder.

One chain is cutting the prices of a range of products by between 3% and 25%. Another is lowering the prices of a selection of items by an average of 25%. An average! Since when did this country suffer food inflation of above 25%? The corporates know, because their PRs assure them, that memories are short and this is never more true than where numbers are involved.

People will soon forget they were moaning about soaring prices and wondering if they were really justified, when they see signs proclaiming “25% off”.

The public will see that as a bargain and nothing makes the shoppers’ pulse beat faster than the prospect of landing a bargain.

You watch, the supermarket executives are murmuring to each other: the 25% lower products will disappear; volumes will climb; head office high-fives all round.

There’s room for a final twist. The supermarkets are not going to embark on a price-cutting programme without milking it for all it’s worth.

That means highlighting how generous they are, how understanding and appreciative of the conditions their customers face, how they’re a caring organisation and will always do their best by the public.

So they will put out releases saying how much this move is “costing” them, how much they’re “investing” in the initiative. Some sections of the media will swallow it — they’re so desperate for a headline.

With a fair wind, and it’s virtually guaranteed, the supermarkets will emerge as conscientious and far from being villains, their chiefs will be heroes.

Investors may not like it, of course. The supermarkets’ IR teams will have to go to work on them, stressing how much their company has been making and how they are now facing looming external threats.

And, get this, they can tell shareholders that in the fullness of time, prices will be heading upwards again — after all, consumers have shown they are willing to pay more thanks to the pressures the grocers have exerted on their living allowances many shoppers have been able to argue successfully for pay rises. So they’re happy and they have more money to spend. Brilliant.

The more you study what’s occurred, and is occurring, the more you realise we’ve been subjected to genius, of the cunning variety. Greedflation? There never was such a thing.

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