The Wall Street Journal reports this morning that the recession has created a consumer-friendly scenario in the UK: “With an estimated five million Britons staying home this summer instead of traveling, the country's leading grocers are slugging it out for shoppers' time and money. They're slashing prices, launching new budget brands and taunting the price claims of rivals in advertising.”
According to the story, “The standoff is having a curious result: Nearly all the major grocery chains seem to be winning. Even with the recession dragging on, many U.K. grocers are posting strong growth in sales and operating profits. Whether the party lasts after the economy recovers is an open question, though, since raising prices again after customers get used to discounts is notoriously difficult.
“For now, the chains are benefiting largely because they moved quickly to keep customers from defecting to discounters.”
According to the story, “The standoff is having a curious result: Nearly all the major grocery chains seem to be winning. Even with the recession dragging on, many U.K. grocers are posting strong growth in sales and operating profits. Whether the party lasts after the economy recovers is an open question, though, since raising prices again after customers get used to discounts is notoriously difficult.
“For now, the chains are benefiting largely because they moved quickly to keep customers from defecting to discounters.”
- KC's View:
