Supermarket sweep and brand integrity

Brand integrity
Brand integrity

Following scandals such as alleged price fixing by all of the major supermarkets, a horse meat scandal as well as accusations of false accounting by Tesco.

Last year it emerged that the brand misstated payments from suppliers, over-stating its profits by £250 million for the year and are currently under investigation by the Financial Reporting Council.

Furthermore, Watchdog ‘Which?’ have recently launched a super-complaint (21 April) against all four supermarkets asking the Competition and Markets Authority to investigate misleading special offers and a lack of easily comparable pricing strategies.

As a direct result of this, consumers are looking to support small businesses – particularly those with a specialist area of interest. According to recent research from AHDB pork (formerly BPEX) consumers were most likely to trust their local butcher than supermarkets when it came to buying meat.

The research found that 92 per cent of respondents trust independent butchers in comparison to the 69 per cent that trusted supermarkets and that 50 per cent were willing to pay more for food produced under assurance schemes.

Mick Sloyan, director of BPEX: “It is clear despite being two years on from ‘horsegate’, British consumers still have some concerns. We will continue to develop our understanding in this area and share our results with the industry so we can improve the position. That said, it is genuinely positive news to see consumer confidence in meat remains high.”

Similar trends can also be seen across the food sector as a whole. According to research by the Soil Association, UK shoppers are now spending an extra £1.4 million a week on organic food pushing sales up by 4 per cent to £1.8 billion in the past year.

While this lack of trust may have a detrimental impact on the supermarket sector, such trends can be utilised by SMEs in order to encourage the growth of their businesses.

Unlike larger corporations with wide and complex supply chains, it is easier for SMEs to trace where their product comes from and to communicate this effectively with the consumer.

In tomorrow’s instalment of the Supermarket Sweep series, we analyse the changes in consumer behaviour…