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ASDA admits to selling games below cost

Wednesday, 28th October 2009 08:23 GMT By Patrick Garratt

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UK supermarket chain ASDA’s admitted to selling games below cost price in order to offer “value”.

The news comes after indie retailer Chips accused the larger UK chains of “bully boy pricing” tactics.

“It might surprise [Chips] and others, but we aren’t making any money on FIFA 10 because the price we have had to pay to the supplier is more than we are charging our customers,” an ASDA rep told GI.

“I am sure the other supermarkets are in a similar boat, so to criticise them as ‘bully boys’ doesn’t make sense to me – how can you be a bully if you are selling something for less than you buy it at?”

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17 Comments

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  1. Madlink

    Wow. This ASDA rep has missed the point entirely. Kudos.

    #1 5 years ago
  2. Psychotext

    Isn’t this technically illegal?

    #2 5 years ago
  3. Peetry

    It’s called a ‘loss leader’, do they think we’re all idiots?

    #3 5 years ago
  4. darthmahon

    They just want to get eyeballs into the shops. Once your in, there is a high percentage you’ll buy something else from them which they do make a profit on so good business from what I can see.

    #4 5 years ago
  5. DrDamn

    While the Asda rep kinda missed the point I’m still not sure how they are bullys. They aren’t pricing low to bully the smaller shops, they are pricing low to get people in to buy other stuff.

    #5 5 years ago
  6. Santa Clause

    “Isn’t this technically illegal?”

    Uuuuh, no? A shope can sell a product at end price they choose.

    #6 5 years ago
  7. elronathon

    I’m surprised people don’t see this as bullying. It chokes business out of smaller stores because they simply cannot compete. An indie store is highly unlikely to have the funds to afford selling anything at a loss.

    Its long been a problem in retail that larger companies are happy to inflict damage on themselves if it means an eventualy victory – ie they bag regular customers.

    Just look at the absolutely shocking Starbucks tactic. Saturate an area with coffee shops thus robbing locals of business whilst not making enough to keep your own stores open. Then when the local competition has been choked they close the majority of their own branches and rake up the remaining business.

    Similarly Asda are guilty of running ludicrous deals on food products because they can afford to which results in local grocery stores losing custom and going under.

    #7 5 years ago
  8. DrDamn

    @elronathon
    I don’t see it as bullying small game retailers as the intention is not to put the small game retailers out of business – they want to take trade from other big supermarket chains. Asda don’t give a monkeys about the small game shops – they just want people to do their main food shop at their store. When The Sun offers special holiday deals are they bullying travel agents? Or are they just trying to sell more papers?

    #8 5 years ago
  9. elronathon

    I don’t really think that the travel agent/newspaper thing is a similar comparison. Both offer different services and are not battling exclusively for the exact same market space.

    A supermarket is competing with other supermarkets AND local business. To claim supermarkets aren’t aware of the extent of their influence is to not give the people in charge due credit of intelligence. Even if this is not claimed as the intention it is collateral damage that would of course be noticed by people who run such business practices.

    #9 5 years ago
  10. DrDamn

    “Both offer different services and are not battling exclusively for the exact same market space.”

    Supermarkets generally want to sell you food, Game stores want to sell you just games. Supermarkets sell a very limited set of games. Game stores sell a large variety. Supermarkets don’t do trade-ins, Game stores do.

    I’m just arguing about the use of the term bully here. Is it damaging – yes but as you said yourself it’s collateral damage. Bullying? – no I don’t see it. If a bully throws something at their target and hits someone else instead were they bullied or an unintentional consequence who got caught up in it?

    There is a difference between this and other local shops where the supermarkets offering is exactly the same as the smaller shop. However as detailed above there is a ig difference between what the supermarkets offer and what the specialist game store offers. Instead of complaining about it maybe they should concentrate on their strengths and highlight those instead.

    #10 5 years ago
  11. elronathon

    I see your point on the bully-collateral thing. I guess I would add that a bully that knew what he threw at a target would bounce off and hit another is intending to harm the 2nd party as much as the 1st.

    I agree that there are substantial differences between games shops and supermarkets. I’m not entirely sure a shop living off trade-ins would survive although I appreciate that service alone also encourages foot-fall.

    #11 5 years ago
  12. pracer

    Ever hear of Walmart? They do this all of the time. But whats worse is once they run out the local bizz, then replace the name brands with their own line of “Great Value” store brands, and they also raise the price. ASDA seems to be just playing the game.

    #12 5 years ago
  13. elronathon

    @pracer: Asda was bought by Walmart only a few years back…I guess they shared the same ideology

    #13 5 years ago
  14. pracer

    @Elronathon

    Guess that explains it then.

    #14 5 years ago
  15. SilkVG

    I can’t see it killing smaller shops anytime soon, because it’s always a limited amount of copies that go cheap, for a very small amount of days. The vast majority of people don’t benefit from the deal, and it’s primarilly done by supermarkets so that they can advertise the goodies to try and entice new customers through their doors.

    It’s been happening with DVD’s for ages now.

    I can’t say I fully beleive they are selling at a loss, because the supermarket giants are usually poised to be able to make deals with their suppliers, making everyone a winner. So even though per unit it appears they are selling with a lower sell than cost, there will probably be a deal in place to receive some units free or even get money back from the supplier.

    #15 5 years ago
  16. Psychotext

    @Santa Clause: I checked… you’re right and it’s not illegal in the UK, though it is in some European countries. Must have been what confused me.

    #16 5 years ago
  17. Gekidami

    Indeed, remember some time back a guy was asking that it be made illegal in the UK to balance things out for smaller shops. There was an article about it on this site.

    #17 5 years ago