Dubai Consumer Mirror

Tuesday, December 12, 2006

The Scam of Scan

Looks like UAE retailers are not enjoying the cold winter breeze because of the constant heat they are under...

"Some UAE retailers are manipulating prices of the essentials in the weekly price basket published by the Ministry of Economy (MoE), a senior government official said."

This is something MoE started earlier this year as a response to desperate cries of screwed masses whose budgets are
getting tighter by the day.

So, every week Min. of Economy compiles a list of comparable prices of basic food items Supermarkets. The list is submitted on Monday.

The list is sent to newspapers to be published on Wednesday mornings.

Gullble readers like myself take these prices and go shopping on the weekend and discover that the prices ARE actually too good to be true.

What an insult indeed. But wait, I am not the only one who got insulted.

"Mr. Johannes Holtzhausen, CEO of Spinneys (which is not included in the weekly list), said the idea of price manipulation to score points on the competition is "insulting" to professional retailers.
He argued that local stores manage tens of thousands of products and do not have the time or the manpower to manipulate the prices of a small fraction of their overall stock.

Errr.. did Mr. Holtzhausen ever hear of

Here is a something to think about.

The next time you head to your favorite hypermarket, pay attention to the price tags. They are on the shelves, not on each and every individual item. And if there is a label on the product, its usually a barcode only. No price.

Not because supermarkets are saving on sticky price labels or labor timing stamping them.

Nope, its because management want to have the ability to change prices of whatever item they want, any time they want and with a flick of a button.

They can change their prices every day. Heck, they can change it every hour if they want to.

It’s very simple.

According to global packaging standards, all product must have a unique barcode number that is clearly visible on the exterior packing of the product. Those barcodes, (most common ones are One-Dimensional), contain basic info about the product such as brand name, type and price…etc

When Supermarket warehousing receives product shipments, they also get a sheet of paper that has barcode-related details and info. Warehousing staff encode barcode scans and their corresponding information (quantity and price…etc) onto the Supermarket main server.

The central server is connected to all cash registers and price-check thingies you usually see mounted on the walls of supermarkets.

So, when you pick up your favorite box of cereal and head to the cash counter, Mr. Cashier scans the side of the box (where the barcode is).

The scan is sent to the server and the server replies back to the register -which is a computer- with the price of that scan (your Cereal).

Of course all this happens in less than a nano-second.

Now; It’s the first of the month, everyone got their paychecks and getting ready to stock-up on groceries.

On the night before shopping-weekend-rush-day, you will most likely find Mr. Warehousing Supermarket Management dude sitting on his computer with a long list, going thru specific basic commodities and items such as Milk, sugar, rice, tea …etc and adding Dhs 0.05 or Dhs 0.10 to their prices on the server.

All what it takes is a couple of hours on the computer and central server will be updated with new prices.

It’s the first of the month. You are in the supermarket. Your fridge is empty and your pockets are full.

Most likely, you won’t care -or even notice– that Dhs 0.05, Dhs 0.10 or Dhs 0.25 price variation of your favorite Cereal. Now, multiply that by tens of thousands of shoppers by thousands of products by the number of branches, answer: Windfall profits.

When it comes to consumer behavior and shopping patterns, we are so predictable

Is this a big secret? No…

What can people do to avoid this temporary hike?

For starters, don't shop for groceries on weekends. Shop in the middle of the month and when you see price discrepancies, report them.


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