A year can be a long time in grocery. “Milk price cuts are good news according to shoppers,” we reported last March, at the height of the 2014 supermarket milk price war.
In a poll for The Grocer by Harris Interactive, nearly 60% of consumers said the mults were right to slash four pints of milk to £1. Just 29% felt £1 was too low a price for a four-pinter.
One year on, Harris has just re-run our poll - and shopper sentiment has turned. Now nearly 40% believe milk is too cheap and just 54% agree milk price cuts are “good news” for consumers. The drop in top-line support, from 60% in 2014 to 54% now, does not appear dramatic but it is significant - especially given increased consumer concern about how low prices are affecting milk quality, dairy farmers and cow welfare.
“I’m happy with things being as cheap as possible, but if this affects the wellbeing of cows in any way I am strongly opposed to lower milk prices,” one consumer told us. Another said: “I’d be happy to pay extra for milk providing it was made clear that the farmers were getting paid a price that they’re happy with.”
I was struck by that last response. Finding a price farmers are actually “happy” with may be a tall order, but several major retailers such as Tesco and Sainsbury’s are indeed making efforts to tell consumers more about their farmer development groups and price premiums. What our latest poll reveals is those efforts are not bearing fruit. We asked shoppers to pick which retailer they thought paid the best and the worst price to farmers - and Tesco and Sainsbury’s didn’t fare at all well. In fact, none of the mults did; c-stores and independents came out top - a result that will alarm anyone familiar with the cut-throat prices paid in the middle-ground milk market.
In some cases, retailer efforts to communicate on farmgate prices are relatively new, so perhaps consumer recognition will improve in time. But for now retailers (and their suppliers) are facing a potential double whammy: shoppers increasingly worry about who gives dairy farmers a fair deal - but, at the same time, they have little clue about who does and doesn’t pay well. It’s a situation retailers must fix sooner rather than later.