Is Dolmio a sacrificial lamb at the altar of the retailers?
When Mars advised in mid-April that some of its Dolmio and Uncle Ben’s products should only be eaten once a week, it was seen by many as a responsible step by one of the big food producers.
However, let’s not forget that the ‘Big Four’ supermarkets are looking to slash the number of brands on their shelves in a massacre that will make Game of Thrones look tame. So perhaps the move by Mars was actually an opportunistic, pre-emptive strike against a brand whose future it might already be debating?
I recently read this LinkedIn post by Jeremy Garlick about System 1 thinking and it being part of the reason the so-called discounters – chiefly Lidl and Aldi – have done so well to steal market share off the competition, and it makes a lot of sense. It also demonstrates why Tesco, Sainsbury’s, Morissons and Asda are cutting the number of brands on their shelves.
In short, the decision-making falls into two camps: the ‘automatic’ and the ‘effortful’, according to the godfather of behavioural economics, Daniel Kahneman.
“System 1 operates automatically and quickly, with little or no effort and no sense of voluntary control”
“System 2 allocates attention to the effortful mental activities that demand it, including complex computations”
So what has this got to do with the big supermarkets?
For years they’ve been telling us that what consumers demand is choice. And that’s why an average store contains anywhere up to 90,000 products! Now ally this to the bewildering number of price cuts and special offers and it all adds up to a mass of confusion and white noise. Recent criticism of Asda for its confusing price cuts is a prime example of this.
If you’re one of the many shoppers who now use multiple retailers for your weekly shop, you’ll recognise the experience of going into the main supermarkets and retracing the same well-trodden route round the store, picking up certain items and ignoring everything on the periphery, so as not to induce a migraine.
Instead of enticing consumers to trade up or push those additional impulse purchases, they have done precisely the opposite and bombarded them into a state of tunnel vision. They’ve made consumers think too hard and it’s resulted in monotonous repeat purchases of the same brands and items.
The discounters, as Garlick argued, have managed to achieve the exact opposite. Low prices are a given, but with smaller stores, fewer products and fewer offers, consumers feel more comfortable making choices. They’re happy to throw in those extra items, or even trade up to a premium variant, still safe in the knowledge that it will be good value.
So, going back to Mars’ decision to apparently sabotage its own sales. When the easiest area in store for the major supermarkets to replicate the discounters is the ambient aisle (fewer premium products commanding higher price points), then why not sacrifice a brand that it might already be thinking of losing and which could be delisted anyway?
Suddenly the rationale for the announcement by Mars becomes less about PR and more about range strategy.