Supermarket tricks to watch out for as cost of living soars

With the cost of living on the rise, consumers are more money conscious. What tactics do supermarkets use to get consumers to spend more money?

Ever walk into the supermarket to buy milk – and come out with a trolley full of stuff you didn’t even know you needed? Welcome to supermarket consumer behaviour, where supermarkets implement strategies to get consumers to buy more items unknowingly.

Australia is currently experiencing one of the worst cost of living crises recorded according to recent data from the Australia Bureau of Statistics. With high inflation rates and stagnant wages, there is no doubt that working Australians are “very price conscious”, says Professor Nitika Garg, School of Marketing at UNSW Business School.

The rising inflation and increasing costs are impacting everyone in the supply chain, from manufacturers to retailers, and are then being passed on to consumers. Consequently, prices are a lot higher than they were a few months ago. How can consumers cope with these escalating costs and price hikes in the current economic climate?

Supermarket consumer ploys to steer clear of

According to Prof. Garg, there are some key tactics to watch out for when supermarket shopping. She says that these tricks are all based on consumer psychology, designed to trigger reminder or impulse purchases for the consumer.

1. Locked-in deals: These are commonly identified by bright red labels on items and typically present a capped price until a specified date. Consumers may be misled into believing that purchasing the item before the deadline offers greater cost-effectiveness due to the deal. However, the price of the locked-in deals is often the same as the original price of the item.

2. Store layout: Supermarkets design the layout of the store to purposely put staple foods such as milk and bread far away from each other – and usually at the back of the store. This tactic is designed to make a consumer walk through the store and spend more time.

3. Bigger-sized carts: Studies in the USA have shown that some trolley sizes in supermarkets have doubled in size since first being introduced. This has resulted in consumers typically buying 40 per cent more food items. The idea behind this is that consumers are tricked into thinking their shopping trolley appears to be missing food items.

4. Music: Have you ever wondered why supermarkets typically play more relaxed, slow-paced music instead of fast and upbeat tunes? It’s not a coincidence. Supermarkets strategically choose calming music to create a relaxed atmosphere and encourage customers to stay longer, enhancing their shopping experience and getting them to buy more.

5. Store deals: the ‘buy two, get one free’ deals and similar schemes may initially appear as an excellent opportunity and a cost-effective method of saving money if it's an item you buy regularly. However, if it’s an item that has a short expiry date, is it realistic that a consumer will consume all three items before the expiry date? Furthermore, certain supermarkets show, for example, ‘buy two for $10’, making it appear as a deal and misleading the consumer by implying that you are saving on cost. However, upon closer inspection, you might find that the price of one item is just its regular price, that is, half of the price of two.

Read more: Supply chains and COVID-19 stock shortages: five things to know

Prof. Garg explains that the obvious answer to why supermarkets use these tactics is that “their purpose is to sell more, that’s their job, they are storing lots of goods. They want you to buy more than what you have on your list.”

The current environment: multi-store shopping and loss leaders

Prof. Garg says the current environment with high cost of living is causing consumers to be more price conscious. With the cost-of-living crisis escalating, it would be in the interest of consumers to shop at different stores to get the best deals, if they have the time, she says.

“You could go to one shop to get your meat and then another to get your veggies because you as a consumer have taken the time to research and know where the best and cheapest products are.”

However, most consumers won't have time to complete multi-store shopping. “It’s all dictated by the basic idea that consumers find processing information at the store or beforehand costly, and this is where supermarket tactics come into play,” Prof. Garg says.

“How many of us will research which product is the best price and do comparison shopping and so on?”

Prof. Garg says consumers protect their cognitive resources and tend to go on autopilot. “As a result, supermarkets give consumers ‘cues’, which might make it look like a product is on a deal,” says Prof. Garg.

“A lot of the tactics are based on getting the consumer in, because once they're in, they will likely end up buying a lot more than they expected.”

Another supermarket tactic is the ‘loss leader’ concept – where supermarkets will lure you into their shop with an attractive deal and bet on you doing the rest of the shop there.

“What all supermarkets are guilty of is advertising some products which are desirable to the consumer and where they are competitive, and most supermarkets won’t make any profit on the item – these are known are loss leaders,” Prof. Garg says.

“Usually, supermarkets will place loss leaders at the front of the store to allow consumers to see from a distance because they know that once you come in, you are likely to buy everything from them or at least, a lot more from them than planned.

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“If you're going in and you're saying oh, they're selling bananas at $1.99 per kg and Coles is selling it at $4.00 per kg, suddenly that's a great deal. But the thing is, how many of us are going to get the bananas from one store and then get the other things from Coles?

“In summary, it’s best to be aware of the consumer psychology that supermarkets use to market their products. If consumers are more aware of these tactics, they can be more mindful of where they want to rely on these and where they want to be wary of such tactics. It’s also important to note that this is not just relevant to in-store supermarket shopping. Online shoppers should be wary of similar tactics too,” says Prof. Garg.