Do you remember when supermarkets started matching Tesco’s prices? From 2010-12 Waitrose and Ocado - even Musgrave, Budgens, Londis and Spar for goodness sake - launched initiatives to match them on price. Meanwhile, big four rivals were busy launching money-back guarantees, with Asda doing so if it wasn’t at least 10% cheaper.
What this signalled, of course, was that Tesco was too expensive. While everyone was going to absurd lengths to match each other, the discounters were ploughing a different course. The rest is history.
Since 2014, however, Tesco’s reset under Dave Lewis - along with massive cost cuts - has made it increasingly competitive. And crucially that’s been everyday prices as much as promotions, as the emphasis has switched from back margin to front.
It was inevitable therefore that Waitrose abandoned its enhanced commitment, made in 2012, to match Tesco on 7,000-8,000 branded items. Investing “tens of millions of pounds” to extend its existing “price match” guarantee, which had covered 1,000 lines, “this is our equivalent of John Lewis’s ‘never knowingly undersold’ pledge,” said Mark Price, the then MD of Waitrose.
The trick was that by committing to only match on non-promoted lines, Waitrose wouldn’t have to compete against supplier-funded discounts. But it was a dangerous game to play, piling pressure on Waitrose buyers to extract all their money from the own-label ranges. And when Tesco started pursuing its more EDLP route, it started to cost more and more to support.
Yet Waitrose stuck at it for a surprisingly long time. How long? The Sunday Times reported it for the first time last weekend. But in fact it has emerged that it quietly scaled its pledge back to 1,000 lines in April 2017.
So why didn’t Waitrose come clean? After all, when other Waitrose pricing initiatives like Pick Your Own Offers ended, and when changes were made to the free coffee and free papers propositions, it faced into the flak.
Waitrose told us this week that the reason for its silence was that the brand price match with Tesco ‘isn’t, and never was, a pledge. It is a benchmark so that customers can be assured that we offer competitive pricing. We didn’t notify customers of the change as we still brand price match’.
Now it’s true that in its Ts&Cs Waitrose reserved the right to change the number of lines. But it’s still a bit disingenuous. It has run countless ads in the past pledging to match Tesco on 8,000 lines. It’s a sufficiently big change to warrant a mention, I would have thought. And the thing is it’s not an isolated example of the less than transparent approach to pricing. Waitrose continues to selectively choose not to display a cost per 100g on certain items. And for some reason it’s always the higher price or higher margin ones. Why does it still do this? Who does it think it’s kidding? Not its customers, that’s for sure. They spot these things a mile off.