Colruyt beats the rest on price

Related tags Price Food

Colruyt, the Belgian retail group, said its prices were the lowest
in the entire retail sector in 2003, beating even the specialist
discount chains.

The company this week released details of its price tracking research over 2003, which compared the price of a basket of food products at its stores with that of its main rivals.

Customers spending a total of €100 on their basket at Colruyt would have paid between €108 and €123 for the same basket at other supermarket or hypermarket outlets (Carrefour, Cora, Delhaize), making them between 8 per cent and 22 per cent more expensive. The same food items would have cost between €103 and €105 at hard discount outlets or wholesalers (Aldi, Lidl, Makro), making them around 3-5 per cent more expensive.

Colruyt said that it tracked the prices of the same basket of food products each month to assess the monthly increase or decrease. For both the supermarket and hypermarket sector and the hard discount and wholesale sector, the price differential followed a similar pattern, peaking in August and narrowing around April.

Colruyt said that every day, a team of 15 people checked the price of 18,000 different products in stores owned by all the other Belgian retail and wholesale operators, as well as those printed on promotional leaflets. Fresh meat and fresh fruit and vegetables are not included in the calculations, the company said.

Calculating the price differential is a complicated affair, with certain items being 'loaded' more heavily because of their importance in the weekly shopping list - for example, a customer is much more likely to buy six bottles of mineral water each week than they are six bottles of whisky.

So Colruyt's price calculations take into account the number of each item sold in its stores. For each product sold, the company multiplies the volume sold in its store by the current Colruyt price and by the price charged by its competitors, allowing it to compare real prices and quantities.

Price has always played a very important part in consumers' choice of which store to shop in, and while other factors such as quality of product, service or shopping experience have begun to have more of an influence in recent years, price is still the most influential factor.

This has led to a revitalisation of the discount sector in many western European markets - notably France and Spain - as weak economies in many countries have made shoppers considerably more price conscious. The sophistication of Colruyt's tracking system has allowed it to beat even the discounters for price, and the company has gone to great lengths to communicate this to its customers. Of course, shoppers are not going to drive for a further 10 kilometres just to shop at a Colruyt store because its prices are lower, but in places where a number of stores compete with each other, such a price advantage - and one which is so clearly documented - could be key.

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