Tesco's new prices

Nody

Cork wrote: »

Irish consumers seriously need to cop themselves on.

They should consider Tescos impact on Irish jobs.

They never have and they never will; there is a reason why border trade is blooming after all.

To the person grandstanding about shopping else where I can only say one thing; shop at real shops instead of Dunnes etc. Go to the local butcher, farmer market etc. if you want to support Irish as anything else is a waste of money. Of course even this will have very limited impact at the end (see Wallmart effect) but at least then you put the most possible profit in the hands of the Irish industry instead of the suppliers in the middle.

shellyboo

Jip wrote: »

Shellyboo, fair enough, you know why prices are high but there's threads every day asking why shouldn't prices be the same here as they are in the UK without putting any thought into it.

You're completely right, but these are the people who are now going "finally! a retailer does something for the consumer!" when that is absolutely not the case.

People in general need to educate themselves on basic economics. There's no point standing in the dole queue crying when you've been sending every penny of your disposable income to another economy.

Jip wrote: »

Don't think for a minute that Dunnes or Superquinn aren't wishing they could do the same, and again their specials aren't for the good of the consumer, it's simply to make themselves more money.

Without a doubt. I'm not suggesting we rely on the retailers to make sound economic decisions - just that consumers should take the economy into account. Yes, Dunnes/SQ might be the better option by default - but they're still the better option.

And if people know all the repercussions and decide that at the end of the day, they don't care - well that's their prerogative too. But the fact remains that the public is being misled. We'd never even have KNOWN about any of these sourcing changes if that internal memo hadn't been leaked.

I just have a strong aversion to being duped.

Jip wrote: »

Despite all the hysteria, Tesco haven't put anyone out of business due to squeezing suppliers or partners, Dunnes have done so with 2 companys, Whelans and Nevlilles Bakery. But was that seen as ok a couple of years ago because there were lots of jobs for these people to move to or just a way of doing business ?

Not yet they haven't...

calex71

posted this in another thread yesterday after spotting this in drogheda, obviously a mistake , still gave me a chuckle though

Jip

shellyboo wrote: »

Not yet they haven't...

No, but the point is Dunnes already have 2 notches on their belt.

K-9

Jobs are already being lost in retail, before Tesco took this action. Super Value and Eurospar gone in Letterkenny and Superquinn in Dundalk and I'm sure loads more in other border towns. Tesco in Letterkenny was dead before this, even at Christmas time. Somebody has to do something!

JohnC.

Jip wrote: »

Despite all the hysteria, Tesco haven't put anyone out of business due to squeezing suppliers or partners, Dunnes have done so with 2 companys, Whelans and Nevlilles Bakery. But was that seen as ok a couple of years ago because there were lots of jobs for these people to move to or just a way of doing business ?

Was there more than one Nevilles bakery? Because there is a Nevilles bakery still running and supplying Dunnes. As for Whelans, they were a company with just one customer. Surely if they were competitive, they would have had more than one customer or could have picked up customers after Dunnes dropped them. If they were not competitive, is it really wrong for their customer to stop using them?

loctite

Jip wrote: »

I understand that, but the point I'm making is that people are by and large neglecting the fact that Tesco are not the sole company in Ireland operating in such a way. At the moment it seems that they're just the popular target for reasons which I largely suspect is purely because they're British.

Someone else just posted a link from back in January I think it is highlighting the fact that Superquinn are turning to northern distributors but yet I don't recall similar threads started over that move.

Yes totally agree with post it is not just Tesco.

We are being screwed by the economies of scale of these large multiples. This whole move, from my perspective, is a large threat to Irish suppliers. Tesco or any other large multiple (insert name here

---

) are not going to allow profits to fall. So they are threatening irish suppliers to reduce the cost of their good or else they will go else where.

This bargaining power has serious consequences for both customers & irish employees.

I know that Tesco has become a target on this thread, but their pricing policy in Ireland is a disgrace. How, in all honesty, can they justify a two tier pricing system in this country?

:mad:

Sinderella

To those of you comparing Tesco UK & Tesco Ireland:
If you have a problem with Tesco ripping us off, why do you travel up north and still give them your money? Why support them? We are subsidising the cheap prices in the UK by paying thru the nose here. If you're gonna go up, would you not give your money to Sainsbury or Asda or Iceland or whatever?

If you feel so strongly about being ripped off, boycott the damn store! Hit them where it hurts. All they care about is profits, they don't care where they reel them in.

Edited to add: Tesco was used to illustrate a point, feel free to substitue with Dunnes / Lidl etc in my post

wmpdd3

loctite wrote: »

Yes totally agree with post it is not just Tesco.

We are being screwed by the economies of scale of these large multiples. This whole move, from my perspective, is a large threat to Irish suppliers. Tesco or any other large multiple (insert name here

---

) are not going to allow profits to fall. So they are threatening irish suppliers to reduce the cost of their good or else they will go else where.

This bargaining power has serious consequences for both customers & irish employees.

I know that Tesco has become a target on this thread, but their pricing policy in Ireland is a disgrace. How, in all honesty, can they justify a two tier pricing system in this country?

:mad:

Because there won't be a two tier pricing policy for long.

thebman

jarvis wrote: »

The fact is, 13000 people in this country are directly employed by Tesco and a lot more indirectly.
I don't know why people are so anti Tesco. They are making real efforts to reduce prices and are spending millions on it.

Take for example the recent alcohol licensing legislation. This states that all alcohol products must be sold from an alcohol section or aisle, it is illegal to sell it from anywhere else in the store, including at the front entrance.
Go into any Dunnes and you will trip over their alcohol displays that are at the entrance, around their fresh food depts and on special offer end displays that are not in alcohol sections. They have ignored this legislation from the start. You won't find any breach of this in any Tesco but if 1 breach did occur you'd be sure to find it in the papers and on here stating that Tesco are irresponsible retailers targeting children with alcohol etc.. forcing the people of Ireland to binge drink on cheap alcohol then indirectly causing all sorts of drink fuelled rows and clogging up A&E rooms and suddenly the whole health service problem is Tesco's fault.

But at least Dunnes are "Irish".

I've seen Tesco with alcohol outside of the designated isle on a number of occasions.

I still shop there, don't buy alcohol there because they have crap id requirements. I'm 25 and have to bring a passport to get served and still might get declined and told to get a garda age card :pac:

shellyboo wrote: »

I'm kind of appalled that only two people in this thread have even glanced at the implications of this new strategy for Irish suppliers, not to mention the wider economy.

And don't be under any sort of illusion here - Tesco are not offering anybody 'value'. They are doing whatever they need to do to line their pockets. Great article from Paul Cullen this morning. Lovely demonstration of Tesco's attitude to Ireland. Pretend we're saving them money while still ripping them off.

Lol that is lovely but people need cheaper prices. Irish businesses will just have to compete or die as a result of this. I would suggest they go to their suppliers with the logic that the economies of scale may be smaller but they won't have an order at all tomorrow and their only customer will be Tesco. It doesn't pay distributors to let a lot of the Irish supermarkets die as Tesco won't take up all the marketshare either. They need to convey that message.

Irish people have been getting ripped off and you go on about the Irish economy but if our economy can't compete then there isn't a lot Irish people can do about it IMO. People will buy the cheapest goods and Irish companies will have to adapt or die.

They may die but there isn't anything anyone can do about that except for Irish supermarkets.

shellyboo

thebman wrote: »

Lol that is lovely but people need cheaper prices.

They will when they're all on the dole cos there's not jobs left. They mightn't be able to get the dole though, since all of the money is being spent outside of the economy. You have to put in if you want to get something back out.

I know that people need low prices. If people need low prices, go to Aldi, go to Lidl, buy their Irish sourced goods. Don't go spending all the money in a UK company that sources everything in the UK, that employs UK staff because it's based in Newry or Lisburn or Strabane.

Lidl have just introduced a "one country, one price" strategy, and 40% of their sales are of Irish goods. That's more than Tesco have anymore. Aldi just invested €350 million in a new depot, created 550 jobs. Go there instead of spending your money in a store that's laying people off and taking business away from the economy. It's cheaper anyway!

And that's not just pie in the sky "jobs will go" crap. 100 jobs gone at Tesco in Dun Laoghaire.

http://www.irishtimes.com/newspaper/ireland/2009/0512/1224246324534.html

People are crying about being "ripped off" by Irish retailers. I say better to be ripped off by an Irish one than raped by a UK one. Yes, we're getting a bad deal. But the only people we're punishing by heading up North is ourselves.

Jip

Kahless wrote: »

Was there more than one Nevilles bakery? Because there is a Nevilles bakery still running and supplying Dunnes.

The one in Macroom is gone.

Kahless wrote: »

If they were not competitive, is it really wrong for their customer to stop using them?

Exactly, is it really wrong to stop using the Irish suppliers that are uncompetitive ?

shellyboo wrote: »

Don't go spending all the money in a UK company that sources everything in the UK

Does it matter if the UK sourced goods are Irish produce ? I don't think so.

shellyboo wrote: »

40% of their sales are of Irish goods. That's more than Tesco have anymore.

Where are you geting that fact from ?

shellyboo wrote: »

Aldi just invested €350 million in a new depot, created 550 jobs.

And your point is ? How many jobs have Tesco created in their multi million euro distribution centres built over the last few years ??
http://www.rte.ie/business/2006/1101/tesco.html
http://www.tesco.ie/press/20061101-600jobs.html
http://www.irishtrucker.com/NEWS/2003/january/2901032asp.asp

eightyfish

More on this in today's Indo.

For Irish suppliers, this could all spell trouble. One source predicts tens of thousands of jobs could be lost as retailers relentlessly continue their drive to lower costs.

It's not just the farmers and factory workers that will be affected -- it's the truck drivers and others who also rely on the grocery trade.

"People probably don't realise the effect this is going to have. If they did, they might be willing to pay a couple of percent more for the groceries to help keep Irish jobs," said the source. Higher-paid jobs such as those of accountants are also at risk.

Also, with an eventual recovery in the value of sterling, prices in Tesco's Irish stores will eventually move up again when the euro begins to depreciate.

Jip

You failt to note that what

could all spell trouble

is a price war between Dunnes and Tesco, it's not expicitly about Tesco and their latest moves as that selected quote above would lead you to think.

eightyfish

Jip wrote: »

You failt to note that what is a price war between Dunnes and Tesco, it's not expicitly about Tesco and their latest moves as that selected quote above would lead you to think.

It's referring to where the price war could go because of Tesco's latest move. Also, I linked it. Here's the full article:

What a difference a boom makes. More than four years ago, when it first emerged that Tesco's Irish operations generated the highest profit margin than any other within the group, consumers didn't pay a blind bit of notice.

Flush with cash and still almost in the middle of what would be a decade-long boom, value was on the bottom of many people's shopping lists. Aldi and Lidl were for Poles and the proletariat, not Ireland's burgeoning ranks of plastic bourgeoisie.

We may have expressed dismay at high prices, but it was in a mildly shocked, "I can't believe it's not butter" manner. Prosperity naturally equated to high prices, or so it seemed at least.

Now that austerity is back in vogue, consumers are up in arms.

In 2004 and 2005, Tesco's profit margin in Ireland was around 7pc, compared to 6.2pc at its UK arm and an average of 5.4pc across its international business. That it's now at 9pc in Ireland comes as no surprise to the trade.

Profit

One senior retail expert reckons that Dunnes was also likely to have been operating on a 9pc margin, despite having a logistics and distribution system that was, and remains, in the dark ages compared to that of Tesco's. That's because of the wider product mix at Dunnes, and because it didn't have other overheads that might be present in Tesco.

Still, while Tesco may be generating a high margin here, it's doing so on reduced revenue as competitors, particularly Lidl and Aldi, continue to take market share. And that has Tesco fretting. Sourcing more product in the UK allows it to sell more cheaply, at least while sterling remains weak, and in doing so, luring back customers.

One industry insider thinks the cat and mouse game between Tesco and Dunnes is costing the Irish retailer. Margins at Dunnes, which is controlled by Margaret Heffernan and Frank Dunne, could now be around the 7pc level.

"Tesco has been softening Dunnes up," said the source who did not wish to be identified. "It opened stores in locations around the country that forced Dunnes to respond. Dunnes spent money opening outlets, many of which aren't performing as well as would have been expected, that added to its overall cost base."

He likens it to a war, with Tesco's manoeuvring inciting Dunnes to use up its financial ammunition, waiting until it's weaker before making even more aggressive moves.

For Irish suppliers, this could all spell trouble. One source predicts tens of thousands of jobs could be lost as retailers relentlessly continue their drive to lower costs.

It's not just the farmers and factory workers that will be affected -- it's the truck drivers and others who also rely on the grocery trade.

"People probably don't realise the effect this is going to have. If they did, they might be willing to pay a couple of percent more for the groceries to help keep Irish jobs," said the source. Higher-paid jobs such as those of accountants are also at risk.

Also, with an eventual recovery in the value of sterling, prices in Tesco's Irish stores will eventually move up again when the euro begins to depreciate.

- John Mulligan

Xterminator

One point that seems to have been missed here, is that one consequence of Tesco, by clawing back border shoppers will be ensuring more VAT is paid in the republic, and thuis boosting the depleted coffers.

this in turn will help ease the tax burden.

I know its not a black and white issue, but i really feel that you cant knock tesco for trying to get people who have been crossing the border to shop in its ROI stores.

grumpytrousers

Xterminator wrote: »

One point that seems to have been missed here, is that one consequence of Tesco, by clawing back border shoppers will be ensuring more VAT is paid in the republic, and thuis boosting the depleted coffers.

this in turn will help ease the tax burden.

I know its not a black and white issue, but i really feel that you cant knock tesco for trying to get people who have been crossing the border to shop in its ROI stores.

think there's no VAT on food anyway though; obviously if you're buying, I dunno, tinfoil there's a benefit to the irish exchequer, but the VAT/Food argument doesn't cut it.

K-9

grumpytrousers wrote: »

think there's no VAT on food anyway though; obviously if you're buying, I dunno, tinfoil there's a benefit to the irish exchequer, but the VAT/Food argument doesn't cut it.

There is on Cakes, some types of biscuits and other non food items.

The most important thing is money being spent in border towns again, even if it is Tesco, guarenteeing jobs and hours in those shops.

eightyfish

grumpytrousers wrote: »

think there's no VAT on food anyway though; obviously if you're buying, I dunno, tinfoil there's a benefit to the irish exchequer, but the VAT/Food argument doesn't cut it.

There's no vat on "fresh" food. This covers veg and bread as well as most chilled ready meals. There's no vat on tea and biscuits, as long as they are not "luxury" biscuits. So digestives have no vat, fully chocolate covered digestives do have vat, and if you have half covered chocolate digestives it gets very confusing.

grumpytrousers

eightyfish wrote: »

There's no vat on "fresh" food. This covers veg and bread as well as most chilled ready meals. There's no vat on tea and biscuits, as long as they are not "luxury" biscuits. So digestives have no vat, fully chocolate covered digestives do have vat, and if you have half covered chocolate digestives it gets very confusing.

and if only to lighten the mood (!) there was that terribly important case taken by, I think, McVities that proved that Jaffa Cakes are, actually, cakes and not biscuits and so they attract (in the UK anyway) a different VAT rate to the products that would sit beside them on the shelves.

http://www.jaffacake.eu/JaffaCake/Cake_or_Biscuit.html