Retailers furious at "price slaughtering" by supermarkets

Independent UK retailers have reacted angrily to Tesco and Asda FIFA 10 promotions that have seen the supermarket giants selling the game at half its recommended retail price - and called for legislation to prevent the below cost selling of goods.

"It's bully boy pricing really," Chips MD Don McCabe told GamesIndustry.biz. "Other countries have laws against this selling at a loss for very good reason."

McCabe admitted that in the short term consumers get a good price, but said that in the longer term the closing of smaller retailers at the hands of the supermarket giants will result in less choice for those consumers.

"Once they've got the whole market they'll expand their profits, reduce the choice and screw the suppliers," said McCabe. And the only thing that can be done is what other countries have, he added, which is to "recognise the insidious march of the supermarkets model is detrimental to the consumer ultimately."

"Long term it is detrimental," he added. "It's decreased choice. You just have to look at the amount of suppliers that are screaming holy blue murder over Tesco whose businesses just get driven into the ground by the demands that some of the supermarkets make on them. At the end of the day, the only people who actually benefit from it are Tesco shareholders."

"This sort of price slaughtering has been going on for years and it will probably always happen," admited Neil Muspratt, director of SimplyGames, who refered to Tesco's pricing action as "crazy".

"The timing of this particular activity is especially unhelpful. Like it or not, software prices are on the increase and selling one of the biggest releases of the year at less than GBP 25 sends a message to consumers that any higher pricing must mean they are being ripped off.

"It is also a particularly negative way to start off the all-important Q4 period and reflects badly on the entire industry – but what do they care? We priced FIFA very competitively and our customers received it in their homes today," he added.

With the supermarkets selling at below cost, Muspratt even admits to buying his own stock from them. "We protect ourselves by keeping stocks to a minimum and, of course, by dispatching small teams of people into supermarkets to buy our next round of stock."

The retail industry is "awash" with others doing the same, said McCabe. "Buy a bit of stock up, wait for the price to go back up, then make your margins. That's retail – or that's the traditional retail model anyway. Supermarkets have turned that model on its head to a certain degree."

Many supermarkets had also sold out of all stock of the game by as early as 8.30am this morning following midnight openings which, when considering the offer is only scheduled to run this weekend in the case of some chains, will lead to large numbers of customers leaving disappointed.

"We all like cheap prices," acknowledged McCabe, "it doesn't matter whether it's games, bread, whatever."

"I understand consumers saying this is a good price, that we should get every game at this price," he says, "but ultimately it will damage the overall market."