“All the dazzling technology, the big data and the sophisticated modeling  ….could not save American journalism from yet again being behind the story…”  

“Data is Dead”

Media commentators on the failure of the news media to predict a Donald Trump victory in the latest US Presidential elections.  

“This idiocy from a company based in a country that offers its electorate the choice of president between a liar and a bully.... Well done Mondelez you just don't get it do you... you've taken yet another confectionary (sic) icon and have trashed it.”  

A Facebook post after the manufacturers of Toblerone decided to reduce the size of its  iconic triangular product and increase the gaps between the chocolate triangles.  

Are South African FMCG retailers and manufacturers also guilty of “just not getting it” to the detriment of their relationships with customers?

Viccy Baker of Retail Price Watch, the consumer website which gives customers more choice when it comes to their purchase of household goods, believes that there is a profound disconnect between what customers expect from their brands and retailers, and what is being delivered.

“There is a plethora of research houses and an alphabet soup of acronyms and buzzwords serving the retail industry in this country.  

“Amidst all this noise the consumer’s trust in brands is rapidly disintegrating – and nobody seems to notice. Just three factual articles published by us in the online press about FMCG issues this year attracted 150 negative comments and fewer than five positive comments about retailers, from consumers.

“I think that there is outright profiteering going on with regard to food. Not to mention price fixing.”

“Let’s burn all the supermarkets.”

“So beware specials, very often the only special about them is that they are not special.”

“Bunch of scammers.”

There is general agreement that online comment on news stories represents the lowest level of communication. Nevertheless the simmering resentment that people feel against certain issues first rises to the surface here and on social media, and hard lessons have been learnt about ignoring it.  

 Baker cites recent examples of manufacturers and retailers riding roughshod over consumers.

“Bruce Whitfield spent more than five minutes berating Toblerone on the 702 Cape Talk Money Show last week, yet this is only one of more than 50 examples of “shrinkflation” recorded by our website over the past two years.  Toblerone is an exception in that it at least took the trouble to inform its customers of the impending changes. In most instances neither manufacturers nor retailers bother. The barcode remains the same despite the change in the product, directly against good retail practice.

“Pick n Pay Tuna for Cats jumped in one month from R9.99 to R17.99, an 80% increase with no apology or explanation. 

“Ritebrand Rooibos Tea 80 units sold by Shoprite, has increased in price by 54% since November last year, from an average of R18.19, to an average R27.99. This is shocking enough, considering that Rooibos tea is a 100% South African product. Yet 80 units of Lipton tea are now selling for an average R53.56, 106% more than November last year. No justification from the manufacturer or the stores, although Unilever declares it is “redefining” sustainable business practices and trying to keep jobs alive.

“Some Spar stores are now selling Snowflake flour 2.5kg for R32 a bag, and on average Spar’s cost of Snowflake is more than 23% higher than it was this time last year. Spar recently introduced a house brand canned mushrooms 285g tin. In fact the proportion of mushrooms in the can is 40% - meaning that the consumer is paying for 60% salt water!

“Woolworths, infamous in many people’s minds for its high prices, shows far greater consistency in its pricing. Presumably consumers are prepared to put up with high prices in return for a level of trust in this retailer.  

“In a basket of 20 national brands measured over a 3-month period this year, Woolworths changed the price of five products. Checkers changed the price of all 20 products, multiple times, as did Pick n Pay and Shoprite, with Spar close behind. Although some of the price movements were down, this often followed a steep hike (in one instance of 48%).

“Bewildered consumers now feel they enter these stores on the defensive, and the sight of merchandisers with long rolls of PI labels moving down the aisles fills them with a sense of panic.

“In contrast, when the price of sugar rose by 15%, Makro (not always blameless in its treatment of consumers) took the trouble to inform its customers well in advance so they could stock up before the price hike hit. This made good business sense for Makro and also put it into a favourable light with its customers.

Baker believes that loyalty programmes and specials have become ways for the consumer to feel he/she is “getting back” at the retailers, and are not in fact gaining greater brand loyalty.

“The researchers got it wrong when they dismissed Trump supporters as being un-American. Toblerone got it wrong by trying to cover a bitter pill with a sweet coating. There is a wave of civic action spreading throughout South Africa. Will it eventually reach the consumer sector?