Tesco stores to close.

[Bletchleyite]

Ironically, our family shop survived because we turned it into more of a convenience store, selling groceries, fruit & veg, etc., where we captured people living closer to us than the Asda who needed something when they ran out. Even more ironically, we bought the groceries to sell from Asda and Kwik-Save which was cheaper than the wholesalers!

Is it ironic? Or is it just competition? You upped your game, so you survived?

It is certainly true that Tesco Express etc offer a high standard of service for local shopping. It's also my observation that independents, often but not always by way of "independent store franchise" type facilities e.g. Premier, Nisa and Spar, are upping their game as a result. That's better for everyone I think - there was little to be said for the old-style run-down convenience store that was not only expensive (convenience shopping always will be) but rarely had what you wanted. Not that I'm saying yours was like that, but so many were.

Neil

 

[jon0844]

Our local store was indeed like that. Now it has expanded to two shops next door (and soon will knock into a fourth) and has become a Premier franchise. Now it's very clean and inviting and sells most things you might otherwise have to go to Tesco for. In fact, I'll be popping out soon to get more milk!

 

[radamfi]

You'd be surprised. Personally, the way I work my monthly budgets I never pay for anything by debit card, though my credit card is always settled at month end. I also prefer the security of a credit card - if it is cloned, I just lose that card (I have two, mainly so I can split out business expenses if I need to) rather than having a chunk of money gone out of my current account.

It doesn't put me off buying odd items from Aldi/Lidl but it certainly would put me off a big weekly shop there as it would mess with how I run my finances.

This is an approach I inherited from my parents, so I'm not the only one who does it.

Generally, most people aren't optimal in their behaviour, and that includes parents. For example, I don't copy my dad in going to the betting shop regularly.

I was disappointed when Lidl started to accept credit cards for no fee. Inevitably that means higher costs and therefore higher prices. In the UK, you really have to pay by credit card, otherwise you miss out on cashback that you would have otherwise had got. Clearly there's almost no point in using a credit card that doesn't give you cashback or other rewards, except if you are taking advantage of a 0% offer, where you save the money in a high interest account that you would have otherwise spent on shopping.

I don't really get the 'monthly budget' philosophy. Just spend as little as possible at all times, and you can then be sure of having enough money.

If all shops starting charging fees for credit cards, then we wouldn't have to worry about cashback or using 0% credit cards. As it stands at the moment, we are getting up to 1% in cashback (maybe more in certain circumstances), but paying much more than that for our shopping as a result of the shop having to pay fess to the credit card companies.

 

[Busaholic]

Generally, most people aren't optimal in their behaviour, and that includes parents. For example, I don't copy my dad in going to the betting shop regularly.

I was disappointed when Lidl started to accept credit cards for no fee. Inevitably that means higher costs and therefore higher prices. In the UK, you really have to pay by credit card, otherwise you miss out on cashback that you would have otherwise had got. Clearly there's almost no point in using a credit card that doesn't give you cashback or other rewards, except if you are taking advantage of a 0% offer, where you save the money in a high interest account that you would have otherwise spent on shopping.

I don't really get the 'monthly budget' philosophy. Just spend as little as possible at all times, and you can then be sure of having enough money.

If all shops starting charging fees for credit cards, then we wouldn't have to worry about cashback or using 0% credit cards. As it stands at the moment, we are getting up to 1% in cashback (maybe more in certain circumstances), but paying much more than that for our shopping as a result of the shop having to pay fess to the credit card companies.

The big boys pay much less than 1% in fees to the c.c. companies, leaving the small fry like me to pay our 3% plus to help subsidise them, with no chance of increasing our prices to cover.

 

[radamfi]

The big boys pay much less than 1% in fees to the c.c. companies, leaving the small fry like me to pay our 3% plus to help subsidise them, with no chance of increasing our prices to cover.

If that's the case, how can the credit card companies make money if they are giving you cashback, and you don't pay interest?

 

[Darandio]

Our US stores (Fresh and Easy) are also all being closed, and we're pulling out of the US completely.

You sold them over a year ago?

 

[Bletchleyite]

I don't really get the 'monthly budget' philosophy. Just spend as little as possible at all times, and you can then be sure of having enough money.

I don't work to a strict monthly budget. The issue for me is that I like to spend *everything* on a credit card and pay it at the end of the month, if I'm spending *anything* on one. It's easier in one place. I also, as noted elsewhere, prefer the security - a cloned card does not leave me stuck.

If all shops starting charging fees for credit cards, then we wouldn't have to worry about cashback or using 0% credit cards.

I would be happy to pay the fee provided it was a simple passing-on of what the credit card company charged the shop over and above the cost of processing that specific transaction had it been a debit card transaction.

I am NOT happy for credit card fees to be a massive profit centre (think Ryanair).

I do object to organisations not taking credit cards at all, as it is a hassle and it *does* make me less likely to shop there.

Neil
--- old post above --- --- new post below ---

Our local store was indeed like that. Now it has expanded to two shops next door (and soon will knock into a fourth) and has become a Premier franchise. Now it's very clean and inviting and sells most things you might otherwise have to go to Tesco for. In fact, I'll be popping out soon to get more milk!

And that's what competition does. Without Tesco Express/Sainsbury's Local/small Co-ops/M Local etc, the local shop would have stayed a rubbishy little corner shop with high prices and a poor range.

Fortunately for small business owners, corner shops do not mainly compete on price, they compete on convenience. So make your shop *better* than a Tesco Express, and you'll still get the customers - indeed you might well get extra loyalty because you're the small guy.

I'm sure many small business owners would prefer it stayed the way it was, but I as a customer don't.

Neil
--- old post above --- --- new post below ---

If that's the case, how can the credit card companies make money if they are giving you cashback, and you don't pay interest?

Like banks, they make money off the people who *do* incur charges and interest, and those who do not are effectively subsidised.

The other option (as you might imagine this is common in a country we both have quite an affinity with, namely Germany) is that you charge an annual or monthly card / banking fee in order to ensure everyone pays the basic cost of operating their account plus a sensible profit margin.

I really don't mind either model provided it is honest, up front and not profiteering excessively.

Neil

 

[radamfi]

Like banks, they make money off the people who *do* incur charges and interest, and those who do not are effectively subsidised.

The other option (as you might imagine this is common in a country we both have quite an affinity with, namely Germany) is that you charge an annual or monthly card / banking fee in order to ensure everyone pays the basic cost of operating their account plus a sensible profit margin.

I really don't mind either model provided it is honest, up front and not profiteering excessively.

Neil

I guess there are enough people in the UK who can't resist spending beyond their means and/or are too disorganised that they can afford to give free banking/credit cards. Whereas in Germany and also in the Netherlands where there is a cultural aversion to being in debt, the banks would not make much money without fees. However, DKB does free current accounts and gives you a free credit card. They will even let UK residents open an account without even visiting Germany if you can get a bank/solicitor in the UK to verify you.

 

[Starmill]

I see on a thread on another forum that Aldi is actually reducing the quality of a number of its items. People appear to be noticing. For the record, I like Aldi and shop there quite a bit (as it's next to the nursery my son goes to) but usually mostly to get basics like milk, bread and eggs etc.

Every company is going to have to cut costs, or increase prices. It's impossible to keep prices low even with low-ish inflation and maintain the same level of quality, and people are kidding themselves if they think otherwise.

This sounds like Poundland - they can't increase the prices of things so they just make them smaller ALDI probably know that their customers will all notice that quite quickly (one of the reasons they are in ALDI!). So instead they reduce the quality of things which people at the very most don't notice until they've got it home. There are, for me, a select few things in ALDI that I don't like that I do like from elsewhere, such as milk chocolate, some bread rolls and some cakes. There's also a small range of stuff that I do like that they never have and probably never will, like some kinds of cheese, certain brands of fresh juice, meat free alternatives and so on. Those aside I could, and sometimes almost do, live exclusively out of ALDI.

 

[Busaholic]

If that's the case, how can the credit card companies make money if they are giving you cashback, and you don't pay interest?

Because the people paying 15-30% apr interest are subsidising the likes of you

Sorry, hadn't read Neil's similar response before posting.

 

[Starmill]

No credit cards or baskets, only open till 8pm and not at all on a Sunday (laws).

No baskets is the one out of those that sounds annoying!

 

[Darandio]

No credit cards or baskets

The latter was the same over here, but seems to be now relaxed with the addition of new baskets, in our local store at least. Don't dare to try and take one over the checkout threshold in order to put your shopping back in ready for packing though!

 

[Bletchleyite]

The latter was the same over here, but seems to be now relaxed with the addition of new baskets, in our local store at least. Don't dare to try and take one over the checkout threshold in order to put your shopping back in ready for packing though!

That I really don't get, as it slows the queue right down.

Neil

 

[Abpj17]

When the local spar became a Tesco Express, it helped the rest of the parade of shops survive. The Tesco attracts the footfall who then stay and visit the other shops - we still have a hardware store and butchers (in addition to pharmacy, tanning salon, a few takeaways, offlicence, hairdressers, post office/newsagent etc.).Some of them overlap with Tesco so lost some business from existing customers for basic stuff, but they are also more specialised/wider choice of products/provide advice so also attracted business from the new customers Tesco was bringing in preference to other local parades.

 

[maniacmartin]

I will not choose a shop based on what cards a shop takes, however if they accept credit cards, that's what I will pay with. For food shopping, I shop in the nearest supermarket to my house, for convenience (which happens to be a 24/7 Tesco Extra).

It's possible to mix and match credit and debit card spending without too much effort. I do something like this:

1. First, calculate how much all your monthly bills, rent etc come to, and then add a bit for as a buffer, to make total X.
2. Have 2 accounts, for 'Bills' and 'Spending' respectively. Arrange for your salary to be paid into the Bills one.
3. On the day your credit card statement arrives, pay it off out of the Spending account. Then transfer a sum of money from Bills to Spending so that Bills is left with X.
4. Spend on the debit card from Spending account, cash drawn from Spending account or your credit card at will, safe in the knowledge that you have enough in the other account to cover your bills. Whenever you make a payment or withdrawal, that the credit card outstanding balance is lower than Spending accounts balance at all times

You have to keep quite a bit of money in the accounts for this, but given that you can get 4% interest on a current account it's not that costly. You can do it with less buffer money and a with a bit of thought, but I think this is simpler to understand.

Online banking, and SMS alerts make this easy.

 

[Bletchleyite]

Online banking, and SMS alerts make this easy.

Not half as easy as all except a very small amount of discretionary spending being on one credit card, though.

Neil

 

[Peter Mugridge]

Noticed in Tesco today, a sign with their keeping the prices down blurb on it - next to a variety of bacon that I notice suddenly now has 7 instead of 8 rashers in it... :roll:

 

[muz379]

I do most of the shopping at Asda as its the closest supermarket to me . The asda I shop at also has a B&M store very nearby so I pop in there and pick up some stuff as well .

Asside from that I will sometimes nip to Salisbury for a change if I have been visiting friends that live near one of the stores .

I used to shop in the likes of Aldi and Lidl quite a lot but have recently gone off them one because of the small selection and also I think its because when I'm on late I know that I can pop to asda on the way back from work whatever the time whereas I actually have to think about when I can go to Aldi or Lidl . I do still sometimes go to Aldi or Lidl if they have a special buy product which I am interested in purchasing . And when I am in there I will pick up food items as well .

Tend not to go to Tesco unless there is something specific on offer which I want . Im not a big fan of the area or clientele in the Tescos that are Near to me .

As for convenience stores . I do use the "corner shop" quite often still , I go in almost everyday to buy a newspaper . It is also handy for bread and milk although the prices are high compared to the supermarkets its handy .

I think one of the things that has died a death is the out of town shopping experience . The Asda , Sainsburys and Tesco that I visit are all in Urban areas close to residential areas so they are often quite busy .

You'd be surprised. Personally, the way I work my monthly budgets I never pay for anything by debit card, though my credit card is always settled at month end. I also prefer the security of a credit card - if it is cloned, I just lose that card (I have two, mainly so I can split out business expenses if I need to) rather than having a chunk of money gone out of my current account.

It doesn't put me off buying odd items from Aldi/Lidl but it certainly would put me off a big weekly shop there as it would mess with how I run my finances.

This is an approach I inherited from my parents, so I'm not the only one who does it.

This is generally how I go about things as well . When I get paid at the "start" of a month I will pay my credit card off in full . Draw a chunk of cash that stays in the safe at home and gets taken out to use for coffees and snacks at work and stuff like that . and then leave only the money in my current account to cover my direct debit bills for that month . Everything else goes into a mixture of savings accounts for different purposes .

I then use my credit card to do food shopping , buy petrol and any other purchases for that month . Then at the end of the month I get paid once again and the cycle repeats .

My main motivation for doing this is that I had next to no credit history being quite young . And as much as I dislike the idea of being in debt and having to use credit cards to buy stuff its unfortunately them little green ticks on your experian credit report that make the world go round .

 

[jon0844]

Noticed in Tesco today, a sign with their keeping the prices down blurb on it - next to a variety of bacon that I notice suddenly now has 7 instead of 8 rashers in it... :roll:

Every little helps.

(Sorry, I resisted all this time but couldn't think of anything else to say).

 

[Aldaniti]

Every little helps.

(Sorry, I resisted all this time but couldn't think of anything else to say).

Tesco - Helping you spend less.

For a huge listed company, from which greed and profit maximisation has reached new heights, that is probably the most cynical corporate strapline I have ever come across, and tells you much about this companys ethos. As we have seen over the last few months, it is a morally bankrupt company which screws its customers for every last penny. None of the supermarkets are ever going to be your best friend, but Tesco is the only one where I would have to be desperate - literally starving - before I would shop there.

 

[Bletchleyite]

Tesco - Helping you spend less.

For a huge listed company, from which greed and profit maximisation has reached new heights, that is probably the most cynical corporate strapline I have ever come across, and tells you much about this companys ethos. As we have seen over the last few months, it is a morally bankrupt company which screws its customers for every last penny. None of the supermarkets are ever going to be your best friend, but Tesco is the only one where I would have to be desperate - literally starving - before I would shop there.

I think they[1] are all the same as each other, so you might as well choose the cheapest or nearest, as is your preference.

[1] I suppose you could argue Waitrose, Booths and the Co-op win on ethical grounds.

Neil

 

[Baxenden Bank]

Every little helps.

(Sorry, I resisted all this time but couldn't think of anything else to say).

Helps who being the question!

'New improved recipe' - improved in what way - improved profits for the supermarket through cheaper / lower quality ingredients?

Cheaper prices - Tesco have just rolled out publicity for cheaper household goods, yet they are still significantly more expensive than the high street discounters. I think the management just don't get it - or perhaps they do, knowing that lots of customers are creatures of habit, don't compare the price of everything they buy, and at the end of the day aren't all that bothered about prices anyway (within reason) so long as they get what they want all in one convenient shop with happy smiley staff.

There is a thread currently running about The Trainline flotation, again they know they are not the cheapest but a large chunk of the market seems happy to pay the extra fee.

Good luck to both of them.

Regarding charges levied on retailers for credit card transactions (passed on to the customer as a fee or not), there is also a cost for handling cash - those Securicor vans taking / delivering money come with a price, the small retailer getting change from a bank is charged. Physically going to the bank, even once a week takes time so there is a cost to that. How does the cost of handling 'cash' compare to the cost of servicing credit and debit cards? Retailers should be offering the customer a discount for paying by debit OR credit card - it saves them money! Imaging the low-cost airlines surviving on a cash transactions only basis - they would have to pay fees to agents etc. It's a cheek adding a surcharge.

 

[Metrailway]

Regarding charges levied on retailers for credit card transactions (passed on to the customer as a fee or not), there is also a cost for handling cash - those Securicor vans taking / delivering money come with a price, the small retailer getting change from a bank is charged. Physically going to the bank, even once a week takes time so there is a cost to that. How does the cost of handling 'cash' compare to the cost of servicing credit and debit cards? Retailers should be offering the customer a discount for paying by debit OR credit card - it saves them money! Imaging the low-cost airlines surviving on a cash transactions only basis - they would have to pay fees to agents etc. It's a cheek adding a surcharge.

No - retailers shouldn't be offering discounts for card payments as cash has always been and still is significantly cheaper to handle than both debit and credit card payments.

British Retail Consortium, which represents the larger retailers, regularly states that a cash payments are cheaper to handle than credit or debit card payments.

According to the BRC in 2013 a cash transaction costs on average 1.29p (0.14% of transaction value), a debit card transaction costs on average 8.8p (0.32% of transaction value), and a credit card transaction costs on average 40.93p (1.00% of transaction value).

Since the BRC figures are for large retailers, I suspect the costs for card payments for smaller businesses would be even greater.

 

[Busaholic]

Retailers should be offering the customer a discount for paying by debit OR credit card - it saves them money!

In which case each individual price ticket would have to give both lots of prices - a bureaucratic nightmare which would end up increasing prices overall. A notice saying '5% off for payment by debit/credit card' would not suffice. In any case most retailers would rather have the relatively small expense of handling cash and know it's there in the bank. There are many and various ways in which credit card transactions can disappear from a trader's account later!

 

[Bletchleyite]

The main issue with cash is, I think, that if you accept any you incur the costs. So only if cash could be abandoned (I can see that as possible within 10-20 years, but not yet) could all the cash-related money be saved.

Think TfL buses.

Neil

 

[LWB]

No - retailers shouldn't be offering discounts for card payments as cash has always been and still is significantly cheaper to handle than both debit and credit card payments.

British Retail Consortium, which represents the larger retailers, regularly states that a cash payments are cheaper to handle than credit or debit card payments.

According to the BRC in 2013 a cash transaction costs on average 1.29p (0.14% of transaction value), a debit card transaction costs on average 8.8p (0.32% of transaction value), and a credit card transaction costs on average 40.93p (1.00% of transaction value).

Since the BRC figures are for large retailers, I suspect the costs for card payments for smaller businesses would be even greater.

Cash itself is very expensive to handle for businesses. Banks charge proportionately to the amount of cash a business banks each night. That is why supermarkets love cashback as it divests them of cash that would otherwise be charged for.

 

[LateThanNever]

The big boys pay much less than 1% in fees to the c.c. companies, leaving the small fry like me to pay our 3% plus to help subsidise them, with no chance of increasing our prices to cover.

To reduce that percentage would recommend joining the FSB who have a very good deal on credit cards - if not quite to the Tesco standard!

Generally, most people aren't optimal in their behaviour, and that includes parents. For example, I don't copy my dad in going to the betting shop regularly.

I was disappointed when Lidl started to accept credit cards for no fee. Inevitably that means higher costs and therefore higher prices. In the UK, you really have to pay by credit card, otherwise you miss out on cashback that you would have otherwise had got. Clearly there's almost no point in using a credit card that doesn't give you cashback or other rewards, except if you are taking advantage of a 0% offer, where you save the money in a high interest account that you would have otherwise spent on shopping.

I don't really get the 'monthly budget' philosophy. Just spend as little as possible at all times, and you can then be sure of having enough money.

If all shops starting charging fees for credit cards, then we wouldn't have to worry about cashback or using 0% credit cards. As it stands at the moment, we are getting up to 1% in cashback (maybe more in certain circumstances), but paying much more than that for our shopping as a result of the shop having to pay fess to the credit card companies.

It is only hearsay but Tesco is strongly rumoured to be paid for accepting credit cards. This seems to me to be likely as they always been aggressive negotiators. Visa, say, would probably be wary if the UK's biggest retailer said that if they didn't match MasterCard's 0.5% payment then they would no longer be in a position to accept Visa cards. Mind you, it may help that Tesco own their own bank.
Always felt that Tesco are pretty smart as well as being mostly s***s.
But the consumer needs people like them to stand up against the oil companies and banks.
The idea that they are more expensive than the discounters is far from clearcut. Tesco 'Everyday Value' which you have to know you'll be happy with (like the discounters' products), and everyday staples are generally at least as cheap as the discounters themselves. Tesco stock the widest range of any of the supermarkets which of itself entails more complexity and cost but that is the price of variety. Maybe their consumers are no longer able to afford variety in store but then, as the world's largest internet grocery retailer, I suspect this variety will migrate to the web. It is not in the interests of branded food suppliers, who mostly make a much better margin than does Tesco, to let Tesco delist and wither - Tesco is their biggest customer and if everyone shopped at Lidl or Aldi brands would barely exist. Dave Lewis - ex Unilever - will know this only too well!
Clubcard seems to be used by Tesco, in a substantial way to get branded suppliers to pay for repeat purchases from their existing customers. That means the branded supplier gets an easy targeted extra sale, so does Tesco, and the customer gets something they want cheaper. There really is nothing not to like! It's a great tool in general as you can get an overall rebate at the checkout every so often - or perhaps a free family visit to Blenheim Palace instead... You've only got to choose.
Suggest talk of Tesco's demise is greatly exaggerated as all this seems pretty smart to me - and we have to be a bit careful what we wish for, as they are Britain's biggest employer after the NHS. (We've become a nation of shopkeepers after all!)

 

[Bletchleyite]

With regard to products in supermarkets, I find that Aldi's own products are usually similar in quality to the supermarket "normal" (not "value" or "finest") ranges, but slightly cheaper than those. Thus if you want a rock-bottom priced shop and don't care about quality, and all the items you want are available in a Value range, you'll pay less at Tesco/Asda.

Neil

 

[Metrailway]

Cash itself is very expensive to handle for businesses. Banks charge proportionately to the amount of cash a business banks each night. That is why supermarkets love cashback as it divests them of cash that would otherwise be charged for.

Yes cashback is popular with retailers because it is provided at virtually zero cost. A retailer has already been forced to pay for the relatively high debit card charge (which is a fixed amount) for the transaction, it may as well offset that cost by reducing the amount of cash it handles.

This still doesn't alter the fact that cash is still cheaper than card for most retailers.

According to the BRC 83% of total collection costs (both cash and card) incurred by large retailers is due to card merchant services charges.

As debit card merchant fees are fixed, the costs are inversely proportional to the transaction value. As most retailers sell low value items, the cost for a retailer accepting a debit card for a low value transaction is a lot higher than banking cash.

For instance, a small retailer has 10 sales equaling £100 in total. If all customers paid by cash, the bank may charge the retailer 60p for the £100 cash banked. However, if all 10 customers paid by debit card, the retailer will be charged 8p X 10 = 80p for that £100.

My 8p charge is very generous - most small retailers will be charged over 20p per debit card transaction.

Now if you were a business which deals with high value sales, then the cost of debit card transactions would be a lower than cash.

 

[radamfi]

Small retailers in the Netherlands are far more likely to accept debit cards than small retail in the UK. But they usually only accept Maestro debit cards, not Visa or MasterCard, not even the debit cards from Visa and MasterCard. Apparently Dutch retailers are only charged pennies to accept Maestro and even some large retailers are reluctant to accept Visa/MasterCard even for a surcharge. So it would appear that Visa and MasterCard are the problem.

I think it is much better for everyone to accept debit cards like in the Netherlands rather than using credit cards in large retailers and having to use cash in smaller ones, which is how it works in the UK at the moment. But I fear there is a certain amount of snobbery preventing this. I have even heard people in the UK complaining about some retailers not accepting American Express because they miss out on generous rewards, ignoring the extortionate fees they charge.