Supermarket Boycott – Part II

In last week’s tirade I somewhat rashly called for a boycott of NZ’s two major supermarkets.  My primary issue is that they favour drivers over other users.  People who drive to the supermarket get free parking and fuel discount vouchers; people who choose other transport modes get diddly squat.

A number of insightful comments (thanks to everyone who took the time!) were made, which I have tried to summarize below:

• Simon observed that the supermarkets’ transport policies would favour the wealthy, who are more likely to drive to the supermarket, over low-income households, who are more likely to find other ways to get there.  And I agree – by subsidizing drivers our major supermarkets are (albeit unintentionally) taking from the poor and giving to the rich.
• Obi suggested that the reason supermarket’s subsidize drivers is because they spend more and hence result in “economies of scale”.  While this seems reasonable at first glance it falls down in practise; if supermarkets did indeed benefit from “economies of scale” then why would you not offer discounts to any visitor who spent up large, rather than indirectly targeting only a proportion of them (i.e. drivers)?  Stated differently, free parking and fuel vouchers seem to be an extremely poor way of targeting lucrative, big-spending customers.
• Andrew ironically observed that both of Auckland’s new central city walk-in supermarkets (Countdown on Victoria Street and New World Metro on Queen Street) offer fuel discount vouchers.  He quite reasonably suggested that coffee vouchers would be more attractive (although I’d suggest that the discount would need to be more than 4c/litre).
• Nick R wondered out loud about why the major supermarkets don’t see home delivery as an opportunity to cut significant costs from their business.  Home delivery, he observed, can be operated from relatively low-cost distribution centres, rather the prime commercial locations required for normal supermarkets.  They would also  avoid the need for so  many in-store staff and check-out equipment.
• George D somewhat rightly noted that supermarkets provide oodles of free parking in order to comply with the minimum parking requirements imposed by local councils.  This is true, although I don’t see supermarkets pushing councils to remove these requirements either.  Until they do I’d suggest that they’re at least guilty by implication.
• Geoff suggested that home delivery may cause more driving in situations where the number of distribution points is small and the density of deliveries is low.  This is true, but is simply a question of scale, rather than an inherent inefficiency to home delivery.  I’m fairly confident that if the number of home deliveries grew then it would be more efficient than everyone driving their own car to the supermarket and home again.
• Sean tried to inject a modicum of calmness into the boycott.  He observed that fuel discount vouchers are but one of the “tricks of the trade”.  He also suggested that the density of deliveries is important, and that these densities are only achieved in Singapore and Hong Kong.  Interestingly he suggests that these countries have another advantage aside from density: Many people in these countries employ service staff who are on-hand during the day to receive the deliveries..

Towards the end of the comments thread Patrick posted a wonderful photo (he’s got a lot of them) of a billboard that is advertising a new supermarket opening in Ponsonby, which I’ve re-posted below simply because it seems to perfectly capture the sentiment that motivated my original post.

I want to finish but standing up to the idea that fuel discount vouchers are a somewhat trivial issue.  My reason for harping on about this is simply that some things are worth fighting for because of the sentiment they embody, rather than because they are in themselves extremely important.  That’s also why I strongly resist drivers who run red lights and who park on footpaths; and that’s why I’m angry about fuel vouchers.  I’m fighting to change the supermarkets’ “default setting” from one where they assume everyone drives, and thus needs free parking and fuel discount vouchers, to one where the recognize that many of their valued customers don’t drive.  (NB: “Default settings” is an importance theme in the field of behavioural economics.  For an excellent and highly readable introduction to this way of thinking try the book “Nudge“, by Thaler and Sunstein).

The other reason I think it’s worth persisting with a supermarket boycott is that there is often value in setting objectives that are difficult but that can be worked towards incrementally.  It’s for this reason I did not feel guilty going to the supermarket this morning.  It’s also why I stopped at the fruit and vege store on the way to the supermarket, so that I minimize the amount of money I spent at the latter; take that Pak n Save.  Aside from trying to avoid supermarkets altogether, you could also try the following actions:

1. Shopping at the new downtown supermarkets that do not provide free parking.  Thus you are voting with your feet insofar as you are avoiding car-friendly stores; and
2. Emailing the supermarket operators to let them know that you don’t appreciate free parking/fuel vouchers.

On that note, here’s some links to online feedback forms for Foodstuffs and Countdown. Best of luck with your own little “consumer resistance movements” – may they blossom and grow in whatever way you wish.

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