Can say that working in the industry has given me a slightly different perspective on this matter...

The majority of customers will shop with price as a main priority.
Although I now support the idea that value isn't just due to price - it's impacted by availability, quality, range and service.

It is interesting to compare the different supermarkets and how they offer value...and then how the customers respond.


As pointed out, the generic supermarket branded stock is actually just relabelled, locally produced (majority of the time anyway) products.

The supermarkets are competing on price, counting on winning customers with low prices on a select few items, which then transfers into more sales from the rest of their basket.

I am not sure what things look like from the buyer/supplier side of things though - whether it is the supermarket or the supplier wearing the lower margins.

It would be better for suppliers if there was more supermarket competition, ie each supermarket does not hold majority of market share, as the supermarkets wouldn't have the same power over suppliers (producing to particular price points for example, as they could just refuse to supply below a certain margin)


It's been interesting to see how different demographics shop though. The outlying suburbs and areas in the hills of Perth etc, seem to put more value on more expensive/fresh/local lines, whereas it seems the closer you get to the city, the less people seem to care about supplier, and the more the lower price.


But the more consumers that support local produce and products, the more the supermarkets are going to invest in keeping local produce on their shelves.
Customers control what sells well and what does not - so ultimately, any customer has the choice, and the power over supermarkets of what to stock and what price to sell it for.

*edit - well that's one side of it anyway. The customers are influenced by how the products are presented though - and as pointed out above, shelf space is actually valuable real estate in a supermarket. Suppliers pretty much have to buy real estate on the shelves to push their products. If they don't put their product on promotion occasionally, or spend the money on merchandising, customers will be attracted to the other brands that are on special, or have more stock on show.