The Changing Face of Britain's Supermarkets

Thirty years ago we would shop in local Town Centres. We'd visit the local butchers, greengrocers, wander around the open market and if we felt rich we'd have an amble around the local furniture and furnishings store. Once a month we'd catch the bus, or if we were lucky, drive our car to the local superstore. As most towns only had one, we didn't have a choice which one to visit.

Once at the supermarket, we'd pass native British vegetables with angled mirrors above them to make it look like they had more stock. We'd pass fruit and salad where the most exotic items on display were dates and pomegranates and maybe once a year they'd get a shipment of blood oranges. We'd wander around fridges chilling two brands of yoghurt, two types of sausage - either beef or pork and glass bottled milk from a local farm. The widest choice came in cheese where there would be up to ten different types and two of them would be foreign. We'd walk down aisles with Tate and Lyle sold straight from the pallet and passed rows of tins where the total foreign food offering was the ingredients of our Saturday Tea Time Spag Bol.

Then we'd proceed to the twenty deep check-out and not complain about the half an hour wait, we'd talk to our queue neighbours and be more concerned about our little ones begging for one of the delights temptingly on display next to the cash register.

Then perhaps twenty to twenty-five years ago the Supermarkets realised they could sell more than just food. They started to sell clothes, electrical goods, tools, kitchenware, records, videos and plants. Supermarkets became bigger and the shelves became wider to accommodate the ever-growing selection of brands. In the yoghurt chillers there were now varieties aimed at the health conscious, dieters, children, the older generation and babies.

The nations passion for cookery programmes and celebrity chefs accelerated the foreign offering and the supermarkets merrily began to stock high margin fruits, vegetables and sauces from all four corners of the planet.

Supermarket owners became bigger and bigger and the cleverest ones gobbled up most of their competitors. Super Store groups that had been around for generations, either fell on their swords or had their fascia changed to reflect new ownership.

Then supermarkets introduced loyalty cards. The unsuspicious public failed to realise the supermarkets could now record a strikingly high number of facts about the their lifestyles. Not only did the supermarkets know what someone was going to have for dinner, they could estimate family income, affluence and even make educated guesses about a Customers health and general well being.

Attempting to grow even more the supermarkets employed highly qualified analysts who could tell them the most effective places to display products and how they could maximise special offer sales. A whole new science of product placement was established. High margin goods were put at hand height, low margin goods towards the floor.  The aisles were ordered so that not too many high cost items were grouped together and discounted items were placed deeper into the supermarket than the full cost item was displayed. Staples, like bread, were also placed in latter aisles in the hope that people would spend more in the earlier isles, but still maximise what they put in the trolley by having to still procure necessities. Then perhaps eight to nine years ago the growth started to stagnate. The non food product offering was at its highest ever and the supermarket groups had not only wiped out the mini markets, they had also wiped out a significant number of DIY chains, newsagents, clothes stores, record and video stores and chemists. The food offering was at its highest ever and the pile them high, low stock keeping unit, sell them cheap groups started to fall by the wayside or were gobbled up and spat out as mainstream supermarket stores.

The growth had been phenomenal. Double-digit growth had lasted several decades, the shareholders wanted more and the City expected more. The supermarkets recognised they had completely saturated their stores with all the product offerings they could possible cram in and realised that sustained growth would only come from offering 'non stock items'.

Then dawned a new era - supermarkets started to offer loans, insurance, banking, credit cards, gas, electricity and mobile phones. Much of this done with the backing of the Super Brands they had created. Customer loyalty and belief in the supermarkets products couldn't possibly be higher. Brands are now used to sell anything from a box of tea bags up to a £500,000 secured home loan.

 The thing that consumers fail to realise is that in most transaction the supermarket is only acting as an intermediary or non value adding introducer to a third party. In the case of loans, they are branded as the supermarkets own, but Asda is actually acting as an introducer for The Funding Corporation, Sainsburys for Freedom Finance and Tesco for the Royal Bank of Scotland.

The supermarkets aren't alone in playing this game, entities like the RAC now act as an introducer to The Funding Corporation and in recent weeks Harvey World Travel now act as a secured loans introducer for Promise Finance.

Long gone are the days when we would visit a specialist to provide a specialist product and as the Goliaths grow stronger, more and more smaller enterprises will fall by the wayside.