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Co-op Profiteering on Baby Formula...your thoughts?(1 Post)
My complaint to Co-op 19.08.14......I purchased a tin of SMA Follow On Milk from your **** branch today and was appalled at the inflated price. I normally pay around £9.50 dependent on which supermarket I go to, but they are relatively the same price give or take a few pence. I know by law the breast milk substitute has certain selling restrictions (ie you can not redeem points, you can not have special offers etc) however, I was shocked at the price in this particular store. Mothers who do not breast feed are constantly made to feel inferior by 'the media' and certain organizations and now we are being hit in the pocket by The Co-op. I'm a loyal Co-op customer, I bank with you and I am a member, the recent stories in the press about the Co-op has made me question my loyalties and now this has just left quite a bad taste in my mouth.
REPLY....Thank you for getting in touch with us. I was sorry to learn of your concerns with our pricing policy.
Central England Co-operative operates a two-tier pricing policy; supermarkets and convenience stores. As it's more costly to operate a smaller store per square metre in comparison to a larger, traditional supermarket, we have to ensure that our prices reflect the operating costs. Some products will be priced identically in both our supermarkets and convenience stores, but some products will be price differently.
Our price of the SMA Follow On Milk in our supermarkets is £9.99, which is on a par with other large supermarkets. Our convenience store price is £10.39. You are quite right in regard to incentives, as this type of product is strictly regulated and I would not be able to offer a voucher towards this type of purchase as this could infringe the legislation that prevents the active promotion of formula milk.
If we were to price match our convenience stores to our supermarkets on every product that we sell, we would not be able to continue to trade in this smaller store format as it would make it commercially unviable. We have a commitment to providing community stores which are there to provide our customers with top-up shopping, food for tonight, impulse purchases, food to go and other convenience goods that are bought in between the more traditional 'large list' shopping visits. We are open about our two-tier pricing system when asked and why it is necessary for us to differentiate between our supermarkets and convenience stores.
We want to trade in locations such as *******, but we cannot provide supermarket/superstore prices in a store of that smaller format. Some supermarket operators retail on a much larger scale than we do, and can therefore afford to minimise the premiums on convenience store pricing as the cost price that they purchase the products for is vastly cheaper due to the buying power that exists. A major supermarket is able to dictate the price it is prepared to pay for goods due to the economy of scale. Central England Co-operative is a regional, independent Co-operative Society that is not operating on the same scale as the major multiple supermarkets and consequently the cost price that we pay for our goods is much higher per item. We can match competitors on some products within all of our stores, but we do have to impose a higher price in some instances. The SMA Follow On Milk is subject to our two-tier price policy.
I hope that this has provided an explanation. We are certainly not profiteering by offering this product at £10.39, but simply trying to provide the **** community with a convenient local store that can be visited without having to drive to a large supermarket.
The recent stories in the press refer to a different Co-operative business to us, but we do understand why many people only see 'The Co-operative' as a single business as many of the regional Co-operatives licence the familiar lime green 'Co-operative Food' brand for our internal and external signage. We appreciate your feedback and the opportunity to explain our ways of working.
Central England Co-operative Limited
MY FINAL RESPONSE.....Thank you for your reply however i feel your two tier pricing needs revising. I can understand that certain products are inflated in these types of convenience stores and am generally happy to pay them because it is 'convenient'. To inflate the price on items like this however, essential items, is incredibly unfair and should not be tolerated. It would make quite interesting reading to see which other essential products you feel you can justify inflating, medicines for example? I was not asking for a voucher from you, what i was stating is the fact that we are penalized as it is by buying this product, we can not claim points or benefit from offers. You are profiting from these essential items because they are items that are needed, and not a luxury, there is a difference and it is wrong that you can get away with this type of profiteering (disguised as it is!)
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