Price perception, ad war

21 Apr 2010

Checkers has been claiming 800 000+ customers because of its better prices and store experience. However, Pick n Pay took it to the ASA and Checkers pulled the ad. Then, last week, Carte Blanche aired its Grocery segment. Their basket comparison of 17 selected items (such as chicken, Five Roses tea and Skip washing powder) revealed a gap of R39.54 between the most expensive, Woolworths, and the cheapest, Checkers adding up to a saving of R2056 over a year. Shoprite was not evaluated.

The prices per basket per retailer were:

Woolworths: 466.61
Spar: 454.50
Pick n Pay: 430.20
Checkers: 427.07

Pick n Pay and Checkers acted fast on this information. Pick n Pay asked why anyone would change their lifestyle or their supermarket for R3 odd difference, which was a good point.

Checkers then rapidly created a TV ad featuring three men dressed in black, green and white respectively on matching ladders. The fourth blue ladder was held by a woman in blue with one foot on the ground and one foot on the first rung. The commentary told a story in which the three men backed down the ladder (representing the price hierarchy of the leading grocers) during the recession, only to grin gleefully and climb back up at the first sign of economic recovery. The woman in blue representing Checkers never took her foot, or Checkers prices, off the ground, while Woolworths (black), Spar (green) and Pick n Pay (white) climbed down and then back up.

In my opinion Pick n Pay is providing some marketing entertainment, US style, with its confrontational new style, while Checkers is milking its ‘better and better' low price status with quirky smugness. Between the two and Carte Blanche, we can be sure that many grocery shopping comparison tales will be told over trolleys, tea and dinner tables for a while to come.