loss leaders ?

darkpagandeath

http://www.rte.ie/news/2013/1218/493642-ifa-food-standards/

I'm confused most of the time people are complaining things are to expensive ... Now there to cheap ?

Supermarkets are taking the hit not grower's has no-one heard of loss leaders ? I've even heard the word minimum pricing on the news mentioned Sounds more like greedy people wanting to keep hold of there high prices and stopping competition. I buy Irish as much as i can but if they insist on trying to keep a high mark-up on stuff i have to buy foreign.

carpejugulum

farmers whining about everything .. what's new

Days 298

Afraid costs will be passed onto suppliers. Damage to local markets. Other than that not much to complain about. Just wish there was actual competition between the giants. One big oligopoly.

darkpagandeath

Days 298 wrote: »

Afraid costs will be passed onto suppliers. Damage to local markets. Other than that not much to complain about. Just wish there was actual competition between the giants. One big oligopoly.

Err they have already said there paying the normal price to the growers ? who's loosing out ?

xploderz

Vested interests.

Politicians in Ireland generally have family links with farmers and publicans.

Lapin

Bertie was the biggest loss leader in world history.

Days 298

darkpagandeath wrote: »

Err they have already said there paying the normal price to the growers ? who's loosing out ?

I said afraid, not that it is happening.... Thats the worry and thus the complaining.

Consumers arent complaining they arent paying enough.

kneemos

I thought Sinn Fein were for the "ordinary man"how come they're siding with the farmers?

dotsman

The purpose of loss leaders is to kill off competition. In this case, the fear is that independent grocers are the ones who will suffer in the short term. Once they are destroyed, farmers would be left with little option but to be fcuked over by the big retailers.

Loss-leader were illegal up to recently - for good reason. There may be a short term benefit to consumers, but the long term impacts can be devastating.

wendell borton

This countries main business is agriculture, we are the "vested interest". The price in supermarkets bares no relation to production costs, someone has got to lose out somewhere it wont be the supermarkets though.

Sauve

Loss Leaders have been around for donkeys years. Well, maybe not that long, but for a long time.
As long as it's a one-off and the suppliers aren't taking the hit, then there's no problem as far as I can see.

Ikea is one example of a retailer who uses this tactic a lot. Their €9 coffee table has been attracting customers (who generally spend a couple of hundred euro per visit) since they opened.

darkpagandeath

wendell borton wrote: »

This countries main business is agriculture, we are the "vested interest". The price in supermarkets bares no relation to production costs, someone has got to lose out somewhere it wont be the supermarkets though.

Government grants EU grants and they still cant compete with EU farmers ?

No Pants

darkpagandeath wrote: »

Supermarkets are taking the hit not grower's

That's what I always thought, but I'm afraid it's not true. The discounts are covered by the supplier. All those 2 for 1 or 3 for 2 offers? The supplier. And they won't speak out because the multiple is their largest customer. Maybe their only customer.

While you're at it, look up "hello money".

NuckingFacker

darkpagandeath wrote: »

Government grants EU grants and they still cant compete with EU farmers ?

We have weatherier weather and soilier soil. Also "the small". These things are well known to contribute to whinging and higher production costs. I'd also take a wild stab and bet that somehow, some way, the Supermarkets are not taking the hit. They have ways and means. "Hello" money and buying "shelf exposure" are just two ways in which they massage suppliers into ensuring a happy ending for the Big Guys.

darkpagandeath

One of them confirmed there paying a fair price to the suppliers .. And again if they are getting a Fair price who exactly is loosing out ?

The_Pretender

Suppliers can only sell their produce at a price that supermarkets are willing to pay. It's not just "farmers whining"

Days 298

darkpagandeath wrote: »

One of them confirmed there paying a fair price to the suppliers .. And again if they are getting a Fair price who exactly is loosing out ?

Price war will kill smaller sellers. They are losing out. Big sellers will gain in the long run. They aren't doing it to be nice.

darkpagandeath

Days 298 wrote: »

Price war will kill smaller sellers. They are losing out. Big sellers will gain in the long run. They aren't doing it to be nice.

I'm confused have supermarkets only just arrived ? And You can buy products from the internet now... We still have shops

kneemos

Days 298 wrote: »

Price war will kill smaller sellers. They are losing out. Big sellers will gain in the long run. They aren't doing it to be nice.

The German stores do it to get the punters in the rest have followed suit.if the farmer can't make money on fruit and veg he can produce something else presumably.Its called the free market.

darkpagandeath

kneemos wrote: »

The German stores do it to get the punters in the rest have followed suit.if the farmer can't make money on fruit and veg he can produce something else presumably.Its called the free market.

no no your confused they would have to buy new fields for that

Silverbling

I went in to buy the lost leaders and milk, I ended up spending €97 on a normal shop plus the Christmas frozen party stuff and stocked up on the booze while I was there.

They may have lost €2 on my veg but cleaned up profit wise on my luxury's.

Business is so quiet it is cash flow that counts

Knasher

darkpagandeath wrote: »

Err they have already said there paying the normal price to the growers ? who's loosing out ?

Aldi are subsiding the cost in order to take market share from their competition. The price their competition is now able to charge has dropped, so must either drop their prices or loose market share. But they also know that every other supermarket but aldi is in the same position, and that the supplier still needs to sell or the product will go off and be worthless, so they are in a very strong negotiating position, their product is worth less to the supermarkets, so they are all willing to pay less. So they end up dropping the price they are willing to buy from the supplier and reducing their profit (and maybe even subsidising), in order to reduce the amount of market they loose. Aldi then are paying above average, so they might as well renegotiate as well. And then the suppliers have no choice but to pass the loss down their supply chain.

Aldi don't exist in a vacuum, what they charge effects what their competitors can charge, and therefore effects what they are willing to pay. How legitimate the farmers concerns are all depends on how long Aldi plan on keeping this up.

Days 298

kneemos wrote: »

The German stores do it to get the punters in the rest have followed suit.if the farmer can't make money on fruit and veg he can produce something else presumably.Its called the free market.

I dont believe the supply is so large that the price has settled at a price of 5c a kg. Smaller shops cant afford to have price wars. This discourages new entrants to the market, reducing competition.

There is nothing wrong for the consumer right now, its a bargain, but the big players arent doing it because they have you in mind.

darkpagandeath

Days 298 wrote: »

I dont believe the supply is so large that the price has settled at a price of 5c a kg. Smaller shops cant afford to have price wars. This discourages new entrants to the market, reducing competition.

There is nothing wrong for the consumer right now, its a bargain, but the big players arent doing it because they have you in mind.

Starbucks put all the coffee shops out of business ?

McDonalds put all the restaurants out of business ?

And allot of the shops that closed did so because of the recession as people were not spending...

Days 298

darkpagandeath wrote: »

I'm confused have supermarkets only just arrived ? And You can buy products from the internet now... We still have shops

*facepalm* Google economics in particular price wars and oligopolists.

kneemos

Days 298 wrote: »

I dont believe the supply is so large that the price has settled at a price of 5c a kg. Smaller shops cant afford to have price wars. This discourages new entrants to the market, reducing competition.

There is nothing wrong for the consumer right now, its a bargain, but the big players arent doing it because they have you in mind.

They do it to get people in the store obviously,the shopper wins the store wins.As with any business if the small producer or seller can't compete they go out of business.

Days 298

kneemos wrote: »

They do it to get people in the store obviously,the shopper wins the store wins.As with any business if the small producer or seller can't compete they go out of business.

Exactly thats the point. Less sellers, less competition and less choice in the future for consumers. Will the shopper win in the long run is the question.

kneemos

Days 298 wrote: »

Exactly thats the point. Less sellers, less competition and less choice in the future for consumers. Will the shopper win in the long run is the question.

As long as Aldi are around I'd say so.

Days 298

kneemos wrote: »

As long as Aldi are around I'd say so.

Yes as Aldi have the consumer at their heart rather than their bottom line. Less competition is bad for the consumer.

darkpagandeath

Days 298 wrote: »

Exactly thats the point. Less sellers, less competition and less choice in the future for consumers. Will the shopper win in the long run is the question.

Don't alot of our exports sell for lower price in the EU than it costs to buy here ? were clearly being overcharged.

Silverbling

I sell jewellery that does not go off, for the last few weeks I am selling my paid for stock at below cost.

People are just not spending this year and as a small business I need the cash flow, I have done the Christmas fairs for a few years, I have 1 that was my "cash cow" it paid for Santa, the heat and the Christmas dinner.

Usually I take between €800- €1200 at full profit, this year I took €225 at less than cost, out of that I had to pay mt teenage son a Wez ticket, the cost of the table and also lost on the stock and lost on the boxes that I put them in to make them more sale-able.

The big supermarkets need to pay the overheads, losing a bit of money on veg to gain on luxury's is a position I would like to be in

Days 298

darkpagandeath wrote: »

Don't alot of our exports sell for lower price in the EU than it costs to buy here ? were clearly being overcharged.

If we are clearly being overcharged you'll obviously bring forth examples. Not as if reduction in sellers is going to reduce the overcharging. If anything it will get worse.

Its not as if the execs in Aldi, Dunnes and Tesco looked and saw the plight of the Irish consumer and wanted to help. If they did they would permanently lower prices to a sustainable level not price wars. Big companies answer to shareholders not consumers.

darkpagandeath

Days 298 wrote: »

If we are clearly being overcharged you'll obviously bring forth examples. Not as if reduction in sellers is going to reduce the overcharging. If anything it will get worse.

Its not as if the execs in Aldi, Dunnes and Tesco looked and saw the plight of the Irish consumer and wanted to help. If they did they would permanently lower prices to a sustainable level not price wars. Big companies answer to shareholders not consumers.

http://www.rte.ie/news/business/2013/0624/458524-irish-food-and-beverage-prices-above-eu-average/

Voltex

Retailer models are changing. Loss leaders were based on getting 90 days EOM..banking cash and gaining margin on deposit interest rates. Aldi and Lidl models of Every Day Low Price (EDLP) is the new model that the MSVC, Dunnes and Tesco have figured out and are applying into strategy. I know cause I'm in the thick of it.

The days of BOGOF and multi-buys will end in favour of EDLP, innovation and buyer experience.

I see it happening that the discounters are riding the crest of a wave right now..but the recognition of what consumers perceive as value has been recognised by the big 3.
The continued use of loss leaders is a temporary tactic until the EDLP model is rolled out.

Days 298

darkpagandeath wrote: »

http://www.rte.ie/news/business/2013/0624/458524-irish-food-and-beverage-prices-above-eu-average/

Cost of living is high here but it doesn't mention suppliers overcharging here over the produce they are exporting. The article even mentions tobacco prices, never really had a tradition of selling that.

Henwin

well as my boyfriend is a former potato grower, i can tell you the suppliers and supermarkets make huge profits from fleecing small food producers. They set the price, you take it or leave it. we always had to pay the price for in store offers.

Seriously he worked from 6 in the morning till 12 at night for years producing potatos. the costs for seed spuds, diesel, spray and packaging are huge, then after all that work and money the suppliers offer you a pittance for them, you hav no choice only to sell them for below cost prices. if you go to the shops directly tey will threaten you that they wont buy any more from you.
Often they wont want them if they have enough, so you hav no choice only to plough them back into the field. heartbreaking stuff.

Bullys the lot of them.
he got out of vegetable growing after loosing thousands and affecting his health through the sprays, overtime hours etc
he is now in dairy farming which at least you get paid for your milk.
I would love if all children in the country get to spend a few weeks on various farms throughout their childhood. it mite open their eyes to the amount of work and money tat goes into farming and they mite change their minds on the 'whinging farmers'

Outkast_IRE

I know food prices are a bit higher here but doesn't anybody think that the quality of our food and standards they are held to, are quite high compared to many other EU countries.

Just from family members living abroad and visitors to the country, they all seem to remark that food quality here is often much higher than their home countries.

The_Pretender

Outkast_IRE wrote: »

I know food prices are a bit higher here but doesn't anybody think that the quality of our food and standards they are held too are quite high compared to many other EU countries.

Just from family members living abroad and visitors to the country, they all seem to remark that food quality here is often much higher than their home countries.

I agree with you saying that food quality is better here, but it's not a case of paying more money for better quality food. It's a case of paying more money to supermarkets who are going to pocket it themselelves without giving the fair share to the farmers who actually produce this high quality food.

Silverbling

loss leaders were expected in the 80's they disappeared during the celtic tiger and are now back, all business's have used them subtly for years, the retailer stands the cost, self employed life is hard enough without being squeezed by suppliers

Voltex

Outkast_IRE wrote: »

I know food prices are a bit higher here but doesn't anybody think that the quality of our food and standards they are held too are quite high compared to many other EU countries.

Just from family members living abroad and visitors to the country, they all seem to remark that food quality here is often much higher than their home countries.

You are absolutely bang on there!! Irish agri-food products are considered higher quality. I was in Migros in Zurich airport recently where Irish fillet steak was being sold for SFr60....we don't give our best industry enough credit.

Rabelais

I love Aldi. But they do lean heavily on their producers. It's the nature of the industry in which they operate. They source more of their goods from Irish producers than any other supermarket chain. But it comes at a cost. We now spend less of our disposable income on food than at any other time in history.

If you want premium meat, bread and vegetables then visit a good butcher, bakery, and F&V shop.

No point complaining about a race to the bottom if you're hand in glove in the whole thing.

darkpagandeath

Rabelais wrote: »

I love Aldi. But they do lean heavily on their producers. It's the nature of the industry in which they operate. They source more of their goods from Irish producers than any other supermarket chain. But it comes at a cost. We now spend less of our disposable income on food than at any other time in history.

If you want premium meat, bread and vegetables then visit a good butcher, bakery, and F&V shop.

No point complaining about a race to the bottom if you're hand in glove in the whole thing.

Why does it have to be ? If producers/suppliers could not make a profit on what they sell to the supermarkets they would already be out of business. Suppliers/producers already undercut each other they just don't make as much profit as they would like. If they had their way there would be minimum pricing and we would all be paying well over the odd’s for stuff

Days 298

darkpagandeath wrote: »

Why does it have to be ? If producers/suppliers could not make a profit on what they sell to the supermarkets they would already be out of business. Suppliers/producers already undercut each other they just don't make as much profit as they would like. If they had their way there would be minimum pricing and we would all be paying well over the odd’s for stuff

Suppliers/producers are price takers. They have no reason the under cut each other. If they had their way they would be earning higher profits, due to perfect competition between suppliers of homogenous goods being discussed in the long run they are happy to produce if they can earn normal profits.

darkpagandeath

Days 298 wrote: »

Suppliers/producers are price takers. They have no reason the under cut each other. If they had their way they would be earning higher profits, due to perfect competition between suppliers of homogenous goods being discussed in the long run they are happy to produce if they can earn normal profits.

So none of them undercut to gain more contracts ? As what your describing is price fixing and then they wonder why people don't listen when they cry wolf ... were not making enough profit .. no no sorry we mean were being driven out of business thats it...

Days 298

darkpagandeath wrote: »

So none of them undercut to gain more contracts ? As what your describing is price fixing and then they wonder why people don't listen when they cry wolf ... were not making enough profit .. no no sorry we mean were being driven out of business thats it...

No I am not describing price fixing. I said "price taking". Google

If the supermarkets/distributors are ripping off producers so much why is it so rare to find a bargain at a farmers' market? Usually the only bargain seems like a "loss leader" itself when prices are cut by half for one day only.

suicide_circus

No point in blaming retailers for this. Consumers (you and I) constantly bitch about prices and demand cheaper and cheaper crap to ram down our glutinous food holes.

WilyCoyote

kneemos wrote: »

I thought Sinn Fein were for the "ordinary man"how come they're siding with the farmers?

Quiet there! Farmers are ordinary men .......... just doing an extra-ordinary job ........ cashing grant cheques, whinging about the EEU common policy, Tesco, Weather, price of agricultural diesel (can only get 60 miles per gallon in family saloon) and GM Foods. AND they eat their dinner in the middle of the day.

camel jockey

I'm boycotting sprouts and all other vegetables this Christmas, in solidarity with the Farmers of Ireland.

sbsquarepants

Fúcking whinging farmers - you'd be sick and tired of them. It's too hot, it's too cold, it's too dry, it's too wet - just shut the fúck up the lot of you - if you can't make a living being a farmer - don't be a fúcking farmer. Simple.

The_Pretender

sbsquarepants wrote: »

Fúcking whinging farmers - you'd be sick and tired of them. It's too hot, it's too cold, it's too dry, it's too wet - just shut the fúck up the lot of you - if you can't make a living being a farmer - don't be a fúcking farmer. Simple.

The point is, if supermarkets don't offer prices to farmers that they can actually live off, then Irish farmers will cease to exist. If this happens, supermarkets are going to have to import the same crops anyway, and in the end we'll still just go back to paying the prices we should be paying or else possibly more, with transport costs taken into account.