After a recent report by Which? found that supermarkets are failing to make their own-brand budget range products available at their smaller outlets, Antony Higginbotham MP quizzed industry leaders in a Business and Trade Committee hearing.
Whilst questioning the heads of Tesco, ASDA, Sainsbury’s and Morrisons, Burnley and Padiham’s MP Antony Higginbotham said:
The customers who rely on those stores, they’re not using it for convenience, they’re typically lower income with less access to cars or good public transport.
So, what are you doing to help make sure in those stores there is a better range of own brand essentials?"
Responding Tesco's Commercial Director Gordon Gaffa said the stores are stocked with "ranges that are relevant to each of their customers", while Sainsbury's Rianna Bartlett added that most of the people who use their convenience stores aren't doing so for their main shops.
Morrisons' David Potts said he visited a housing estate in Aberdeen a few weeks ago and could see what Mr. Higginbotham was getting at, adding that the use of convenience stores there would be very different to the Tesco Express by Westminster Tube station.
Potts admitted that Morrisons are fairly "new into this game", as it expands its Morrisons Daily outlets after buying out McColl's in late 2022.
He added: I believe there are plenty of own brand in the convenience stores across Britain. We have lowered the prices opposite McColl's by up to 10% when you go to Morrisons Daily.
But I am happy to shove a few Savers (from Morrisons' Savers Range) that we talked about earlier in this meeting into those stores, especially until the food inflation normalises in this country.
I think that would be a good thing to do, particularly in those areas where people are relying on that site.”
On the issue of vulnerable and lower-income customers with fewer opportunities to shop around, Burnley and Padiham’s MP asked Gordon Gaffa why Tesco has a minimum order of £50 for its online shops.
Speaking in the hearing Antony said:
Are you just pricing out lower-income families from online shopping? That is double by the way the Morrisons minimum order”.
Tesco’s boss replied:
“The £50 minimum basked size is the first change we’ve done in nearly eight years. The average basket size online is £90.”
He said it was reasonable to impose this limit based on the average orders made by customers, and the inflationary pressures faced by the industry.
The sector has scrambled this month to pass on some reductions in wholesale costs for essentials as the Competition and Markets Authority (CMA) investigates whether customers are paying over the odds. The regulator is due to report back next month.
