Waitrose is a supermarket with such a good reputation that house prices soar when one opens in a new area (or so the urban myth goes). So, why do Waitrose feel that they need to compete on price?

But on a closer look perhaps my confusion is easily allayed by the detail of the offer: brand price match.

Heinz beans? Same price as Tesco.
Branston Pickle? Same price as Tesco.
PG tips?… you get the idea…

Waitrose’s unique selling point has always been the gourmet element of their product range, things that you would usually only find in Sainsbury’s at Christmas. But of course they also sell everyday items, they are a supermarket after all, and, despite their market positioning, it makes a certain sense that they stock these items at competitive prices, particularly in an aggressive marketplace.

This is an interesting strategy for Waitrose, and I wonder if Ocado has a role to play in this. As customers become more familiar with online grocery shopping perhaps they will start to make regular or even automated purchases of everyday items using online supermarkets (Tesco already store customers favourites and now have a grocery iphone app). But, beyond these bread and butter transactions, there is much more diversity to shopping baskets, and amid a clamour for quality home cooking and healthy eating, Waitrose are actually complementing their USP with a price strategy that doesn’t penalise their customers for shopping there. Perhaps Waitrose are pre-empting a move by customers to seek out the cheapest online supermarket for goods that are available ubiquitously, but will seek out bricks and mortars stores or specialist retailers for luxury purchases and treats?

So maybe Waitrose aren’t compromising their values by offering brand price match. It’s an economic crisis after all, and everybody has to fight for their market share. Like Pizza Express, maybe quality and low price can sit together harmoniously as part of brand positioning.

Waitrose brand price match press ad from the Independent (from NMA)

And there’s early evidence that Waitrose’s brand price match is working, despite some suggestion that the price match doesn’t always mean a price reduction http://www.waitrose.com/forum/default.aspx?g=posts&t=1467. An interview with Waitrose MD Mark Price gives a clue to this strategy back in July, when discussing the new Essential Waitrose range with the Telegraph, who say “The entry-level segment was built on the idea that Waitrose’s prices could be brought down sufficiently to allow customers to shop there for daily food needs, while retaining the brand’s reputation for quality.”

Tesco's PPC ads in Google's sponsored links

Nothing wrong with that, and in the light of me hearing that they would be starting to stock a few more North American beers I thought I’d take a look.

Tesco's landing page: good or bad PPC strategy?

Alas, I need to sign in as an existing customer, or register.

Now I’m not really interested in going through the red tape of registering just to see Tesco’s beer range, so off I go on my previous ‘online journey’. So in my case, Tesco’s PPC tactics have led to a potential lost sale.

But I did wonder whether this is actually a good tactic? If I’m only browsing, yes they’ve paid for my click, but they haven’t had to waste time analysing lots of wasted traffic from a ‘tyre kicker’ like me, who wasn’t actually likely to buy.

Those that do register and browse are much more likely to buy, and their web stats should reflect the behaviour of people actually in the market to purchase. Plus, I wonder if this tactic actually has led to an increase in registered users?

By no means best practice, and not quite sure if this really fits Google’s landing page policy, but I maybe the amount Tesco spend on PPC probably Google’s concern over that…