Examination of Witnesses (Questions 1000-1019)
4 DECEMBER 2003
MR RICHARD
ALI, MR
DAVID CROFT,
MRS SUSAN
BROMLEY, MS
PENNY COATES
AND MR
DAVID NORTH
Q1000 John Austin: Could I take these
special offers, et cetera. We have looked at the number of marketing
offers that you make on fruit and vegetable. Tesco has the highest,
looking at the website recently, with 10 price promotions on fresh
fruit and veg, but that is compared with 30 on biscuits, cakes
and confectionary. Therefore, even for the store which has the
larges fruit and veg offers, it is quite small compared with offers
on other products. Alcohols is one of the biggest, I have to say,
on Tesco, as well as biscuits, fruit and veg. In the other stores
across the range, whether it is Sainsbury's, Asda, Safeway, the
number of promotional offers on fruit and veg is much lower than
on other products. Would you comment on that or consider increasing
your offers on fresh fruit and veg?
Mr North: I wonder,
again, if this is an area where we might, either individually
or through the BRC, give you some more information. I am not sure
if, when you look at the figures, that turns out to be true. It
may well appear that way from the website. I mean, in terms of
produce, fruit, vegetable and salad promotions, we have about
50 per week rather than the 10 that you have quoted. As a general
point, I think if you look at our promotions per week you will
certainly find that promotions on fresh produce, vegetables, fruit,
salads, will be in proportion to their importance within the business.
John Austin: I have to say, as a customer,
that if I go into my supermarket I tend to look at the BOGOF—buy
one, get one free—options on the vegetable stalls.
Chairman: Is that a London term? I have
not heard of that before. That is a new one on me!
John Austin: It is certainly south London.
I appreciate the comments that were made by Tesco and I think
it might be something that either through the British Retail Consortium
or individually you could give us. I would be interested to know,
if you could submit this in writing, what have been your most
effective promotions for fresh fruit and veg, whether it is leaflets,
advertising, two-for-one offers, or "buy one, get one half-price"—and
I am not sure what the initials for that are. I would also like
to know how those promotional offers compare with your most successful
promotions for, say, confectionary, biscuits, et cetera. I do
not think we want to sound like Big Brother but we do have the
ability to request information even if you claim that there is
commercial confidentiality.
Q1001 Chairman: Could you provide that
information?
Ms Coates: Yes.
Mr Ali: I am happy to collate
it.
Q1002 Chairman: In relation to your marketing
strategies and your product ranges, do they vary significantly
between different demographic areas, your middle class areas and
working class areas? If so, in what way? Ms Coates, I know you
were born in God's own county, but you have spread all over the
place, from areas like Leeds and my part of the world. So you
see a distinction in the way you organise your stores, bearing
in mind the nature of the population that you serve?
Ms Coates: This
is one thing that Walmart's actually brought to us. We have systems
now which allow us to understand better the rate of sale, by time
of day and by store, so we can actually range to an appropriate
store. But the way that is done is not as much by demographics.
We put a standard offer in there—it will be tailored, say,
for ethnic communities and things like that; it will be tailored
to what they particularly want at the time of opening—but,
on an ongoing basis, we would look at sales, listen to customers
and we would find out what it is they actually want from that
store that they cannot get or what they want more of, et cetera.
We would monitor that ongoing. The amount of space and the actual
range within the store would reflect that trend over time. It
is tailored to the population, yes, but not specifically. So I
could not say, "Do I put more fruit and veg? No," into
a certain type of store. I mean, not necessarily—it is usually
dictated by space—but often it will be the first thing you
see in the vast majority of stores. We would try to merchandise
it so that it is attractive to consumers, but the actual range
within that section will be determined really by the customers
in the store rather than by us once we have had our best attempt
at it when we have opened up.
Q1003 Chairman: Mr North, would you accept
that?
Mr North: I would
agree very much with Penny's point, yes.
Q1004 Chairman: Could I ask another question
which ties in with the point I have just made, how you monitor
your customers' shopping habits. We all have these loyalty card
things. John has a pocket full of different cards here. This is
a Sainsbury's card. I actually thought I had no interest to declare
but I realise that Sainsbury's sponsor Wakefield Trinity rugby
League Club and I have shares in Wakefield Trinity Rugby League
Club, so I declare that interest. Presumably, Sainsbury's can,
through this, work out what my personal shopping habits are. One
newspaper last week described me as a chip-butty man. Would it
be possible, for example, with Mr Amess when he is shopping at
Tesco in Canary Wharf, if he is buying too many pork pies, somehow
to remind him. I make a serious point here: you have immense power
with these things to know what people are buying.
Is it not getting George Orwell 1984-ish to suggest
that perhaps there is a mechanism through the use of these to
steer people in some respects more towards healthier products?
Mr Ali was talking about his affinity with sausage sandwiches.
If he went overboard on sausage sandwiches and it was noted on
his loyalty card—I am making a serious point. Is there a
way, looking ahead at what we might recommend, that the other
side of the story of these things could be that there is a way
in which people could be assisted to purchase more healthy products?
Ms Coates: From
ASDA's point of view, we do not actually operate a loyalty card
scheme.
Q1005 Chairman: I know you do not.
Ms Coates: We have
some information through people shopping from home, internet shopping,
we get some information about people, but the information we have
is probably less than from a loyalty card.
Q1006 Chairman: When I use my Visa card
when I pay for the shopping at ASDA, you have got my name and
details on there and exactly what I bought. You give me a receipt.
Ms Coates: No,
it is only loyalty cards on which you would have individual's
details. We would know that you paid by Visa but we would know
nothing about you.
Q1007 Chairman: So you would have no
record. Tesco's give a loyalty card, so you have got that information.
Could it be used in the way I am suggesting?
Mr North: We do
have a club card.
Q1008 John Austin: And a credit card?
Mr North: Yes.
Can it be used as a way of understanding customers? Yes, absolutely,
to understand how, for example, purchases change over time, how
people's expectations and their buying habits change over time.
Can it be used to point out new opportunities to customers? Yes,
it can. I think underlying that is an issue of how it is done.
Just as it is possible to encourage customers into new directions,
for example if you bought one particular brand of vegetables would
you like to try another brand of vegetables with a money-off voucher,
it is also possible to alienate customers if you do it in a way
that is not consistent with what they are looking for or in a
way that they might find either patronising or draconian. It is
a matter of approach and style, I think.
Q1009 Chairman: Does the Consortium have
a view of this point, Mr Ali, about whether there might be a way
in which, with the knowledge your members possess of purchasing
trends and individual's choices, people could be steered in a
healthy direction?
Mr Ali: I presume
the underlying point to your question is retailers know what works
and what does not on communicating with their customers. Generally,
each retailer has its own customer base. Some people are very
loyal to individual retailers and some are rather like the floating
voter, they change. What retailers are very good at is finding
out what their customers want and anticipating their needs. What
we have always said to Government is, "Look, when you are
looking at your policy and encouraging people to adopt a healthier
lifestyle, whether that is eating more fruit and veg or eating
less of certain products, we are very happy to work with Government
to say `these communication methods work, these communication
methods do not work, these communication messages do work and
these are the ones you should steer clear of'." It might
be that as a retail industry we can sit down with Government and
start to design the messages from the information that retailers
have. We have already said to Government, "We want to work
with you so you can have a proper education campaign across departments",
whether it is through GPs' surgeries, whether it is through other
physical means where Government communicates. I get my Council
Tax bill, and I suppose the next one will be April, but a little
piece of paper comes through the door and I read it. I get my
Inland Revenue demands. I get umpteen other communications from
the Pension Service and others. There are huge amounts of interaction
between the Government and the population. As long as we have
consistent messages that the whole industry can buy into, and
communication messages that really work, we do want to help.
Q1010 Chairman: You are saying there
is a willingness there quite clearly.
Mr Ali: There has
always been a willingness among retail to work with Government
on healthy eating. The document we sent in we were working on
a year ago, this was not something in response to this Committee
at all.
Q1011 John Austin: I noted the position
of the Co-op earlier on when you were describing your peculiar
position as a consumer organisation and, therefore, perhaps a
different sort of ethical outlook. I note with interest that you
have actually taken a unilateral decision to stop advertising
food high in fat, sugar and salt during children's television
times. I would like to ask you why you have taken the step and
I would like to ask the other stores whether they approve of the
Co-op's decision and if they would be willing to follow suit?
Mr Croft: If I
could answer that point, but first would you mind if I mention
a little bit about loyalty schemes as a follow-on to the previous
question. I think the Co-op can rightly claim to have the original
loyalty scheme with the Divvy.
Q1012 John Austin: 154546.
Mr Croft: What
we find within that is that we have been able to use our Dividend
contact in terms of trying to promote alternatives and healthier
diets through promotions and so on and so forth, but also we have
been able to use it and its input at a community level to try
and generate greater community health initiatives. The Dividend
supports what we call the Community Dividend which has enabled
grants specifically to community self-help groups, things like
Breakfast Clubs, healthy eating cafes and so on and so forth.
The value that creates has been quite immense within the communities
involved. At the same time we have also developed that loyalty
scheme to allow a community food discount card and that allows
a discount to self-help groups in local communities, often communities
that would be described as food deserts, which means that they
have a much greater access through the loyalty scheme to a broader
range of products and enables a more balanced range of products.
I think that Dividend and loyalty schemes have a role to play
in encouraging the sorts of activities that we are involved in.
Turning to the point about advertising, we made the decision based
upon reviewing information and comments from consumers, particularly
talking to parents about the sorts of issues that they face whilst
shopping and the question of pester power that has come up this
morning. We also looked closely at work that had been done in
Sweden at about the same sort of time and we have Co-operative
activity in Sweden through part of the Co-operative movement internationally.
We felt that because of the long-term concerns over the way that
diet is set at an early age as far as children are concerned that
if there was an opportunity to influence that and reduce the sorts
of advertising pressures that are brought to bear then it would
be an appropriate type of activity for a consumer organisation
to be involved in. Within our report back in 2000 we highlighted
these issues and did quite a lot of work with a psychologist to
review the sorts of pressures that advertisers placed upon children
at times when they were clearly going to be the main audience,
be that between four and six pm in the evening or on Saturday
mornings. By far the greatest numbers of advertisements were to
do with food products that were high in fat, salt and sugar. We
felt that was not an appropriate route for our TV advertising,
which was at the time growing, and we reflected that policy, and
continue to reflect that policy, in the position of our advertising
throughout, and at the same time not using things like cartoon
characters or toys on Co-op brand products as further incentives.
That has been something that we have held dear since looking at
that particular policy and will continue to pursue in the future.
Considering the influence that advertising may have upon children
at an early stage I think it is an important part of structuring
diet for the long-term.
John Austin: Would the others like to
comment?
Ms Coates: I agree
with everything that David has said. In terms of our advertising,
it tends to be very much generic advertising around the ASDA brand
and the ASDA shops, so we do not do it any way.
Mr North: Mine is the same point.
Tesco does not promote any products directly to children either
through television or any other medium.
John Austin: I accept it is more a question
for the food manufacturers than the retailers.
Q1013 Mr Jones: I want to return briefly
to labelling, which was mentioned earlier. If I could direct this
to you, Mr Ali, since you volunteered your liking for sausages.
There is fairly widespread dissatisfaction with food labelling,
it is not well understood by the general consumer. It is difficult
to imagine that you could have a sausage which is truly low fat
but of course you can have sausages which are lower fat than other
sausages are.
Mr Ali: Yes.
Q1014 Mr Jones: To get people to understand
the likely fat content of any particular food so they can work
out whether lower means much at all, surely the only important
thing is in the overall balance whether people are eating a lot
of high fat foods or whether they are not, it does not really
matter if they do eat some sausages, it is whether they eat sausages
and other high fat foods. What is wrong with a much simpler system
which is "This is high fat, medium fat, low fat"? Virtually
all sausages are going to be high fat; some sausages might be
medium fat. What is wrong with that?
Mr Ali: Labelling
is now a harmonised requirement. The European Commission is looking
at the whole area of nutrition labelling as part of their review
and obviously we will be contributing to that. I think the Food
Standards Agency recently did its own review and that identified
some issues that consumers have and looked at possible alternatives.
I do not believe there was any firm conclusion on what all consumers
would consider the best labelling. Different members here use
different types of labelling to get over the key points and they
use that labelling because they believe their customer base prefers
it. Obviously, going forward, what would be fantastic is as the
industry contributes to the European Commission review that what
comes out of that review is labelling that consumers find useful.
We all want to make sure that consumers have the most useful information
on there.
Q1015 Mr Jones: Can I just intervene
there. When you say "we all want", I can understand
that in terms of general retailers, you are before us, you have
got an interest in selling a wide range of products, but it is
surely not true to say that collectively "we all want"
because with better consumer information we wish to influence
the way they buy products and there will be some products that
we wish to buy a lot less of. The manufacturers of those products
have not got this altruistic reason for informing the customers
that eating a lot of their products may be bad for them.
Mr Ali: I can only
speak on behalf of our members and I hope I am speaking on behalf
of the Committee as well when I say "we".
Q1016 Mr Jones: Thank you. Are there
any other contributions on that issue?
Ms Coates: On labelling,
if we are going to move to a very simple policy, and I think we
all want to give simple information to customers that allow them
to make their choices, when you said that I thought there are
things like salt and sugar to consider as well. I am not sure
that it is just one-dimensional around fat.
Q1017 Mr Jones: No, but this is an investigation
into obesity. The issues of salt and sugar are also true but for
obesity fat is the big issue.
Ms Coates: Yes.
Q1018 Dr Taylor: A very brief point on
labelling. Would you consider refusing to sell an item with grossly
inadequate labelling? I went to a children's party very recently
and they were giving out those packets of crisps that look like
bits of bacon. I looked at a packet and I tasted one and there
was so much salt that I just could not eat them and yet on the
packet there was no mention of salt content. This was not a brand
that is sold by any of the people here. If there was something
like that which was flagrantly not telling people there was a
vast amount of salt in it, would you refuse to sell it? Is it
significant that you do not sell that particular brand of bacon
crisps or is it coincidence?
Mr Croft: It may
be coincidence but certainly in the past, and we continue to do
this, we have taken up issues with branded manufacturers where
our consumer members have raised concerns over the clarity of
labelling that has been used and to date those manufacturers have
been more than happy to work and change the standard and style
of their labelling to be clear about the information that is on
there. Whilst they have not necessarily gone as far as we would
like them to do in terms of applying high, medium or low, or being
very upfront on the front of pack by stating the amount of fat
and salt very clearly, they have at least made certain that there
is clarity about what that product contains. We think they could
still go further and we continue to raise issues over labelling
in terms of the sorts of claims that are made around labelling,
for example percentage fat-free claims which Government advice
has already been to avoid and yet it is still quite common on
certain brands because of the amount of fat that is still left
in the product. We would continue to support, both in our own
brand and taking things up with branded manufacturers where our
consumers raise them with us, more clear labelling to make it
very apparent what the true nutritional nature of a product is
and in terms of the additives and other ingredients present.
Q1019 Dr Taylor: Would ASDA and Tesco
do the same, take it up with manufacturers?
Ms Coates: I suspect
with the brand in question—I do not know what it is—that
when consumers saw that they would have raised similar issues
as with you, which is why we do not stock it. I do not know which
one it is but I imagine that is the reason why.
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