Smaller Supermarkets Mark Up Prices by 21% Compared to Giants

Updated on: October 14, 2024 2:37 am GMT

Shopping at convenience stores such as Tesco Express, Sainsbury’s Local, and Morrisons Daily may be convenient, but a new study reveals that this convenience comes at a steep price. According to research by the consumer organization Which?, shoppers can end up paying up to 21% more for the same items compared to their larger supermarket counterparts.

This price discrepancy may be surprising, especially for those who rely on these smaller stores for their everyday groceries. The study covered a range of 42 popular food items, from staples like pasta and milk to treats like ice cream and blueberries, and the findings were clear: if you want to save money, it’s better to steer your shopping cart toward larger supermarkets.

Significant Price Differences for Essentials

The survey conducted by Which? highlights that the cost of grocery essentials can vary drastically depending on where they are purchased. Here are some key findings:

• Morrisons Daily: Shoppers pay an average of 21% more. For example, a 400g tin of own-label chickpeas costs £1 compared to 49p at a Morrisons supermarket.
• Tesco Express: Customers could see an average price difference of 10%. A pack of six Mr. Kipling Bakewell Slices is priced at £2.32 at Tesco Express but costs £1.50 for Clubcard holders at large Tesco stores.
• Sainsbury’s Local: The difference stands at around 5%. A 500g bag of Sainsbury’s own fusilli costs 20p more at the convenience store than at a full-size Sainsbury’s.

These examples illustrate that opting for convenience might not only strain your wallet but could lead to substantial annual expenses. For regular shoppers at Morrisons Daily, the added costs could accumulate to over £832 each year, assuming they purchase the same products consistently.

Loyalty Card Pitfalls

Many customers utilize loyalty cards, believing they will help reduce costs. Unfortunately, Which? found that members of loyalty programs often face even higher prices at convenience outlets.

• Morrisons More Card: Shoppers using this card might pay 22% more at Morrisons Daily, as the card is not accepted at these smaller locations.
• Sainsbury’s Nectar Card: Members reported an average increase of 14% at Sainsbury’s Local stores.
• Tesco Clubcard: Members can expect to pay around 11% more in Express stores than at larger Tesco outlets.

While retailers claim they tailor their pricing to fit the shopping patterns of customers at smaller stores, this means that loyalty perks do not always translate to savings.

Understanding the Higher Prices

So, why do these smaller stores charge so much more? Retail experts attribute the price increases to several factors:

• Higher Operating Costs: Convenience stores are typically located in city centers and urban areas with higher rents and overhead costs that must be passed on to consumers.
• Limited Stock: Smaller stores often carry a narrower selection of products, which can lead to higher prices on the items they do sell.
• Market Demand: The convenience model is designed to cater to shoppers who need quick access to groceries, even if it means paying more.

Ele Clark, retail editor at Which?, emphasized the broader implications of these findings. “Many people are without easy access to transport or online deliveries,” she noted. “This leaves them reliant on smaller nearby stores. While these convenience options are useful, they can lead to significant spending over time.”

Conclusion: Choosing Wisely

For those looking to save money on groceries, the evidence is clear: buying from larger supermarkets rather than convenience stores is typically the better option, especially for price-sensitive customers. While convenience stores serve important needs for those in urban areas, awareness of the potential costs can help consumers make informed choices.

If you find yourself frequently shopping at a local convenience store, it may be time to evaluate your shopping habits. By understanding the pricing structures of these outlets versus larger supermarkets, you’ll be better equipped to manage your grocery budget.

For more information about how your shopping choices affect your wallet, visit Which? to explore their comprehensive studies and articles on consumer spending.

Today, knowing where to shop can help you save a lot of money. When you understand your options, you can make smarter choices and get better deals.