Price Variations: Retail Realism or Rip-Off?
By Bernice Hurst, Managing Director, Fine Food Network
Over the past several years, complaints have reverberated around the UK about so-called clone towns where all the shops are the same as in every other town. According to a recent investigation by the Sunday Telegraph, however, this does not ensure that prices are the same wherever you shop. Apparently shoppers selecting certain popular Christmas presents "are being charged up to double the price for the same goods in different branches of some chain stores," the newspaper found.
Toys, books, perfume and DVDs were checked in ten branches of each of twelve stores including such well-known names as WH Smith, John Lewis, HMV and Currys. Some stores confirmed that they deliberately varied prices to "compete with local markets."
Gill Barr, marketing director of John Lewis, described it as "retail realism" although WH Smith said it used the price changes in "trial promotions" that would help it to make pricing decisions "for next Christmas."
The National Consumer Council said shoppers would be "appalled" to learn that they can pay more for the same present from the same store in a different city. "The only upside of the fact that so many of our High Streets have the same shops is that prices can be consistent, but that is clearly not happening and people are being ripped off."
A spokesman for Consumer Direct, the Government-funded watchdog, pointed out that it could be unfair or possibly illegal if "they have claimed in national advertisements that the prices will be the same." He added that complaints would be passed to trading standards officers whose spokesperson, in turn, said the price variations were "fraught with problems" for retailers as "some customers may well feel they are being misled."
Of course some customers might be pleased to find both products and prices to suit them, seeing more realism than rip-off in the variations.
Discussion Questions: Does it make sense for retailers to sell the same goods for different prices in different areas? Is this good or bad practice? How aware are consumers of this practice?
[Author's comment] You have to wonder how many consumers know (or care) about this. Many check prices on the internet but even if they discern variations from one branch to another, they are hardly likely to drive lengthy distances to save a few pounds. What it may do is increase even more the incidence of online spend.