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loss leaders ?

  • 18-12-2013 09:27PM
    #1
    darkpagandeath
    Closed Accounts Posts: 24,461 ✭✭✭✭


    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.


«13

Comments

  • #2
    carpejugulum
    Registered Users, Registered Users 2 Posts: 523 ✭✭✭carpejugulum


    farmers whining about everything .. what's new


  • #3
    Days 298
    Closed Accounts Posts: 1,301 ✭✭✭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.


  • #4
    darkpagandeath
    Closed Accounts Posts: 24,461 ✭✭✭✭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 ?


  • #5
    xploderz
    Registered Users, Registered Users 2 Posts: 128 ✭✭xploderz


    Vested interests.

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


  • #6
    Lapin
    Banned (with Prison Access) Posts: 18,183 ✭✭✭✭Lapin


    Bertie was the biggest loss leader in world history.


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  • #7
    Days 298
    Closed Accounts Posts: 1,301 ✭✭✭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.


  • #8
    kneemos
    Registered Users, Registered Users 2 Posts: 22,609 ✭✭✭✭kneemos


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


  • #9
    dotsman
    Registered Users, Registered Users 2 Posts: 3,636 ✭✭✭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.


  • #10
    wendell borton
    Closed Accounts Posts: 3,335 ✭✭✭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.


  • #11
    Sauve
    Registered Users, Registered Users 2 Posts: 22,646 ✭✭✭✭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.


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  • #12
    darkpagandeath
    Closed Accounts Posts: 24,461 ✭✭✭✭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 ?


  • #13
    No Pants
    Closed Accounts Posts: 3,346 ✭✭✭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".


  • #14
    NuckingFacker
    Closed Accounts Posts: 5,221 ✭✭✭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.


  • #15
    darkpagandeath
    Closed Accounts Posts: 24,461 ✭✭✭✭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 ?


  • #16
    The_Pretender
    Registered Users, Registered Users 2 Posts: 594 ✭✭✭The_Pretender


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


  • #17
    Days 298
    Closed Accounts Posts: 1,301 ✭✭✭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.


  • #18
    darkpagandeath
    Closed Accounts Posts: 24,461 ✭✭✭✭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


  • #19
    kneemos
    Registered Users, Registered Users 2 Posts: 22,609 ✭✭✭✭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.


  • #20
    darkpagandeath
    Closed Accounts Posts: 24,461 ✭✭✭✭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


  • #21
    Silverbling
    Banned (with Prison Access) Posts: 311 ✭✭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


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  • #22
    Knasher
    Registered Users, Registered Users 2 Posts: 2,370 ✭✭✭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.


  • #23
    Days 298
    Closed Accounts Posts: 1,301 ✭✭✭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.


  • #24
    darkpagandeath
    Closed Accounts Posts: 24,461 ✭✭✭✭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...


  • #25
    Days 298
    Closed Accounts Posts: 1,301 ✭✭✭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.


  • #26
    kneemos
    Registered Users, Registered Users 2 Posts: 22,609 ✭✭✭✭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.


  • #27
    Days 298
    Closed Accounts Posts: 1,301 ✭✭✭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.


  • #28
    kneemos
    Registered Users, Registered Users 2 Posts: 22,609 ✭✭✭✭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.


  • #29
    Days 298
    Closed Accounts Posts: 1,301 ✭✭✭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.


  • #30
    darkpagandeath
    Closed Accounts Posts: 24,461 ✭✭✭✭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.


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  • #31
    Silverbling
    Banned (with Prison Access) Posts: 311 ✭✭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


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