Reports
Misleading the Consumer? February, 2000
1. Are British supermarkets misleading their customers?
2. Are British supermarkets being disloyal to Scottish salmon?
4. Is the strong consumer loyalty to Scottish salmon, as found by the MORI poll reflected in the marketplace?
5. Is country of origin important to salmon consumers?
6. Why has SQS so openly criticised British supermarkets?
Cheating British supermarkets have been warned that they face a strong consumer backlash, or even risk losing a section of their customer base, if that pass off imported Norwegian salmon as Scottish. This warning comes from Mike Lloyd, marketing director of the new salmon representative and marketing organisation in Scotland, Scottish Quality Salmon.
Mike Lloyd said that many of British supermarkets are taking advantage of Scottish salmon's excellent world-wide reputation to sell imported salmon without stating where it is from. He has arrived at this conclusion because two thirds of people surveyed in a MORI poll claimed to have bought Scottish salmon, but only 40% could remember seeing a country of origin label.
Mr Lloyd claims that trusting customers have been hoodwinked into thinking that they are getting the best quality salmon when they are not. He said that customers should not be fooled by statements such as "Product of the UK" on pre-packed salmon. Instead he advises consumers to be cautious when buying salmon and to look for the Tartan Quality Mark, which is endorsed by SQS.
This cautionary advice from Mike Lloyd of the SQS raises a number of key questions.
1. Are British supermarkets misleading their customers?
The answer to this question is no. It is total nonsense to suggest that British consumers are being hoodwinked into buying imported salmon, when they think that they are actually buying Scottish. A survey of the packaging and labelling of pre-packed salmon, currently available at all the major British multiple retailers, shows that Scottish salmon is always labelled as such and therefore consumers are not being misled.
There is no doubt that labelling can be confusing, so that any consumer, who takes the time to read all the small print on some of the packaging, would be unclear as to from where the salmon actually originates. Equally, none of the labelling implies that the salmon is Scottish, when it is not. As Mr Lloyd rightly points out, "Product of the UK" refers only to the fact that the salmon has been processed in the UK, not that it was reared in the UK. This loophole in EU labelling legislation is however, not just a problem for the SQS, but one which affects the wider agricultural sector, where it is a much greater issue. Mr Lloyds' comments come at a time when this labelling loophole is the subject of national discussion and the probability is that the UK Government will soon insist that all labels must include a clear statement of origin.
Yet, until this issue is resolved, Mr Lloyds suggestion that the inclusion of the phrase "Product of the UK" on a pre-pack may indicate that the salmon is not Scottish, but imported, is rather undermined by the fact that the packaging on Safeway TQM Scottish salmon fillet actually states "Produced in the UK". The full findings of this survey are as follows:
Table: Survey of salmon pre-packs available from British supermarkets.
Of the15 pre-packs surveyed from eight store groups, only three contained the wording "Produced in the UK". One of these packs is fully labelled as Scottish and also carries a TQM sticker. The origin of the other two is unclear, but there is no suggestion that the salmon is Scottish. The majority of pre-packs are printed with the different statement "Packed in the UK". This simply means that the salmon is packed in the UK and as such carries no inference at all to its country of origin.
It should be stressed that in each case the wording "Produced in the UK" is so small and often buried amongst other wording that it can hardly be said to be misleading to the consumer.
The multiples have responded in an article in the Grocer magazine, by saying that they have tight controls in place to prevent the occurrence of inaccurate labelling.
2. Are British supermarkets being disloyal to Scottish salmon?
The criticism of British supermarkets by SQS comes as a surprise, since it is less than a year since an independent study of the state of the Scottish salmon farming industry, commissioned by the Scottish Office and Highlands & Islands Enterprise and conducted by Public & Corporate Economic Consultants (PACEC) was published. In this report, the SSB, forerunner to the SQS of which Mike Lloyd was also marketing manager, confirmed that several large multiple retailers who had previously resisted using the Tartan Quality Mark (TQM) on packaging were now doing so. If this were true, then these current accusations of cheating are hard to believe, since the statement that several large multiple retailers must encompass virtually every British supermarket group.
Immediately after publication of the PACEC report, Callander McDowell conducted another round of its regularly survey of British supermarket chains, investigating the market penetration of the TQM mark. The results are repeated below:
Table: Presence or absence of TQM salmon in the major retail stores, on and around 30/4/99.
Notes.
a). Safeway have only a limited number of fresh fish counters. Previous visits have found fish both tagged and not tagged with the TQM.
b). Although no TQM present on fish counter itself. Stores display TQM poster on the back wall of the fish area. This is not always where the customer looks.
c). Pre-packs do not include the TQM, but a TQM shelf label is attached to the display case. However, many other shelf labels in use and the one TQM label is not that evident.
d). M&S stock packs with an integral pre-printed TQM, However, the store also stocks Orkney salmon, which does not carry the TQM and is priced at a premium.
e). Waitrose use pre-formed TQM price labels on the fish counter.
f). Tesco have at times used TQM on pre-packs, but their pre-packs change regularly and have been either TQM Scottish salmon fillets, Scottish salmon fillets (no TQM) or just salmon fillets (no mention of Scotland or TQM). Currently, both Scottish (no TQM) and non Scottish are both evident
g). The fish counter at Selfridges in London, does stock fish with TQM gill tag and display a TQM poster. However, at the last visit, Glenarm salmon, from Northern Ireland, were also available priced well above that of the TQM Scottish fish.
It is interesting to note that the authors of the PACEC report interviewed all the major retailers representing an average of 85% of all salmon purchases. These retailers stated that they would not substitute non quality branded salmon, if the price of branded Scottish salmon increased.
The actual wording of this statement is somewhat confusing since it is highly unlikely that any producer or processor would supply branded salmon, which is of inferior quality. This is more likely to mean non branded, quality salmon, i.e. salmon which meets their quality requirement, but is not TQM branded. It is not clear from this statement whether they mean that the salmon should be Scottish or not. However, it is clear from both the survey carried out last April and also the current one, loyalty to the TQM brand is neither universal, nor of a similar standard. This refers to the fact that whilst Safeway salmon includes a TQM sticker complete with traceability code number, M&S salmon only has an integral TQM mark, with no individual pack coding and Morrisons, who just display TQM posters and shelf labelling, but do not mark their packs at all.
A MORI poll, commissioned by SQS, found that half the 1945 consumers surveyed said that they would not buy salmon again from a supermarket that they have found to be cheating. One in ten said that they would boycott such supermarkets completely.
Sadly, SQS are deluding themselves if they really believe that half of salmon consumers would stop buying salmon if they found the labelling on pre-packs to be misleading. It is even harder to believe that 10% would actually boycott the store concerned. This is for two main reasons.
The first is that because of the way in which most consumers do their food shopping. Most consumers are loyal to one specific supermarket, usually their local one, which they visit once or twice a week to make all their food purchases. Thus, consumers will visit the fruit and vegetable section to buy their weekly fruit and vegetable needs, the meat section for their meat and so on. If the consumer wants fish, then they will either buy fresh fish from the wet fish counter, a chilled pre-pack or frozen . If the specific fish they want is not available, then they will buy something else or leave it for that week. What is highly unlikely to occur, unless the fish is required for a special occasion, is that the consumer will visit a competitors store.
Mike Lloyd, of SQS, states that consumer should look for the Tartan Quality Mark which is of course endorsed by the SQS, when buying their salmon. Yet, the results of the survey of pre-packs available from British supermarkets shows that only two, possibly three, stores offer TQM salmon. It is extremely unlikely that a regular Sainsbury's customer is going to make an extra visit to Safeway to buy TQM when Sainsbury's offers a whole range of pre-packed salmon products. The fact is that most consumers trust their supermarket to supply food of the highest possible quality for the price paid, irrespective of whether it carries additional quality reassurance or not.
This is confirmed by an in-house customer survey conducted by Tesco, details of which were published i n the PACEC report, Tesco found that whilst 69% of customers would buy Scottish, rather than imported salmon, even if it were more expensive. However, when asked if they would be put off buying salmon from Tesco if it were not Scottish, most people said that they felt that the quality should be the same if it comes from Tesco.
The second reason why British supermarkets are unlikely to face a customer backlash is that the results of the SQS survey might, themselves be misleading. Even though the survey was conducted by a respected market research group, the way that the questions were posed might produce a result which is weighted towards the existing views of the SQS. Without access to the specific questions posed, there will always be an element of doubt that there is such strong consumer feeling towards salmon purchases. The subject of opinion polls will be discussed further in the next question.
4. Is the strong consumer loyalty to Scottish salmon, as found by the MORI poll reflected in the marketplace?
According to the latest MORI poll, commissioned by SQS, two thirds of the 1945 people surveyed believed that the best salmon in the world comes from Scotland (although in a major publicity blunder by SQS, the leading food trade magazine "The Grocer", reported that these consumers thought Norwegian salmon to be the best in the world). As mentioned previously, the problem with such surveys is that whilst SQS are happy to provide the answer, there is never any mention of the question posed. This could have been asked in a variety of ways. Three such possibilities are:
i. Where does the best salmon in the world come from?
ii. Does the best salmon in the world come from Scotland?
iii. Which country produces the best salmon in the world, Scotland, Norway or Chile?
The answer will be very different depending on how the question was actually phrased. Additionally, because the survey was amongst British consumers, it is not surprising that Scottish salmon was most highly favoured.
Whilst the SQS are ready to toast their successful achievement with 66% of consumers expressing the belief that Scottish salmon is the best in the world, these results should be compared with another survey commissioned by the Scottish Salmon Board, the forerunner of SQS. A survey conducted by AGB/GFK and used to promote TQM salmon in a magazine advert in March 1996, found that 76% of British consumers preferred Scottish salmon. The current findings would suggest that 13% less consumers would actively select salmon from Scotland. This undermines the view that there is a strong consumer loyalty for Scottish salmon .
5. Is country of origin important to salmon consumers?
According to the SQS MORI survey, 78% of consumers said that it was important to know the origin of the salmon they buy. As previously discussed, the phrasing of the question posed during the survey could have a significant outcome on the response received. For example, the two questions, "Is it important to know the origin of the salmon you buy?" and "What are the most important factors influencing your decision when buying salmon?" could produce very different answers. As such, it is questionable whether the views of these 78% of consumers are reflected when they actually buy salmon. This is because only 40% appear to remember seeing a country of origin label when making past purchases. This mirrors the level of pre-packs currently available carrying a Scottish label, as can be seen from the earlier table.
The results of the MORI poll also conflict with the findings of the last market survey commissioned by the International Salmon Farmers Association, of which SQS are members through their sister organisation, the SSPO. The ISFA found that country of origin was the least important factor influencing consumer demand.
6. Why has SQS so openly criticised British supermarkets?
Supermarkets now account for the majority of sales of salmon. PACEC found that the major retailers sell about 85% of Scottish salmon sales in the U K. With such dominance in the market place, it would appear to be a negative move for the industry representatives to so openly criticise the major conduit for sales of the industry's product. Thus, there must be a significant motivation for taking this action, but clearly, only SQS are able to provide a full explanation. Yet, it is possible to draw some conclusions from both the SQS statements and from more general observations of the market place.
The principal tenet of the Scottish salmon industry is that Scottish salmon is the best in the world. As such, it is expected that consumers should be prepared to pay a price premium to obtain the best in the world. This is the overriding message of all Scottish marketing activity. This is clear from the Scottish Salmon Board Advertisement placed in the retail trade magazine, the Grocer. This states that 76% of consumers prefer Scottish salmon to any other and that 72% are willing to pay more for it. This willingness to pay more for a high quality product is echoed by the Tesco in-house survey.
Yet, the expression of a readiness to pay more for Scottish salmon over any other does not appear to be reflected by what consumers actually pay in the market place. The reality is that there is no real price premium for Scottish salmon. This is clearly apparent from the pricing of the pre-packs in the current survey:
Fillets.
Asda - £9.58/kg
Asda Scottish - £7.69/kg
Safeway TQM Scottish - £9.01/kg
Sainsbury's - £7.65/kg
Sainsbury's - £3.30/kg
Somerfield - £11.63/kg
Tesco Scottish - £8.72/kg
Tesco TQM Scottish - £11.95/kg
Steaks.
M & S TQM Scottish - £8.30/kg
Morrisons Scottish - £4.60/kg
Safeway TQM Scottish - £11.96/kg
Tesco - £8.70/kg
Although the most expensive salmon happens to be TQM endorsed Scottish, other salmon, which has no declared country of origin and no TQM endorsement, is only a few pence cheaper. By comparison, the cheapest salmon is labelled as Scottish and whilst not carrying a TQM sticker, was bought from Morrisons, a retailer, which promotes its salmon as being endorsed with the TQM. This salmon was significantly cheaper than any other.
There is no clear trend to the pricing of salmon in the UK and it would appear that individual store groups charge what they think that they can obtain. Yet at the same time, salmon is often subjected to significant pr ice discounting. Just prior to last Christmas, a time when salmon prices are usually higher, salmon was heavily discounted in the UK market place.
Safeway were then selling TQM tagged whole salmon at the same price as Tesco, cheaper even than Asda and Sainsbury's. All were advertised as being half price and thus even before the discounting, there was no price differential. Such observations plainly undermine the claims that Scottish TQM salmon commands a premium price over other salmon in the UK market place.
This failure to generate a price premium for Scottish salmon must reflect on the whole marketing strategy of SQS and the Scottish industry. It would appear that whilst consumers are ready to state a willingness to buy Scottish salmon and even to pay a price premium, their actions are very different. Most consumers buy salmon because of its' low cost, especially compared to other fish species, and because it represents real value for money as an everyday meal option. Most consumers are simply not bothered as the origin of the salmon they buy, preferring to be influenced by the value for money price.
Unfortunately, the consumer response to salmon does not appear to match the expectations of the industry and rather than accept this and adapt their marketing strategy accordingly, the Scottish industry have looked for a scapegoat to explain their failure. In this instance, rather than blame Norwegian competition directly, SQS have redirected their attack at British supermarkets and labelling regulations. The problem for SQS is such a strategy may backfire because as most consumers are quite happy to buy non Scottish salmon, the supermarkets may well oblige.