Doesn’t quite prove what is claimed

So what, you ask? Well, consider this. If Tesco decides to stop selling Marmite – a move analogous to Apple blocking the distribution of Twitter’s app – then I have six supermarkets within a mile of my home who do sell Marmite, and I simply drive to another. I don’t incur what economists call a switching cost. Six years ago Tesco did just this, objecting to Unilever’s profit margins by pulling Marmite and other products from their shelves. The supplier caved.

Noooo. For is the supplier caved then Tesco had power over the supplier. Therefore the switching costs must have been high. If people would just gain their ~Marmite from any of the other 6 supermarkets then Unilever’s sales would not fall, Tesco would have no power over Unilever and so Unilever would not have caved…..

We could surmise that those switching costs were objectively small – possibly – but they were obviously sufficient.

BTW, Tesco has an own brand yeast extract. Not too shabby either.

16 thoughts on “Doesn’t quite prove what is claimed”

  1. He did incur the cost – time/fuel for the extra drive (walk), assuming he spent something like £50 in Tesco then £3 in Asda. Or whatever. The twat might not think it’s a big cost, but it is there.

    Anyway, I occasionally wonder who produces the own-brand stuff for the supermarkets – is it Unilever using excess capacity on the marmite line to bang out jars for Tesco et al?

  2. ‘is it Unilever using excess capacity on the marmite line to bang out jars for Tesco et al?’

    Sounds plausible, Ducky.

  3. Tesco is not effectively a monopoly (unless it was the only store in a small town) unlike Apple’s app store which is the only way to distributes apps.

  4. Yes and if tesco retail price was less than the competition in the first place, then there’s a solid switching cost right there in the higher price. i.e. if you have to buy it from the village shop (which i have occasionally had to do).

  5. What sort of masochist trails from one supermarket to another in search of esoteric delicacies like Marmite?

    Is it the sort of masochist who quotes an example that contradicts his theory?

    Will Twitophiles switch to android phones and escape Apple’s evil thrall?

    Am I turning into Question Mark? (Horrors!)

  6. Dennis, Your Guide To The USA

    One difference between a wog and a septic:

    The wog will walk a mile to get Marmite and the septic will walk a mile to avoid it.

  7. The wog will walk a mile to get Marmite and the septic will walk a mile to avoid it.

    Given what you yanks laughably refer to as “beer”, it’s no surprise you don’t appreciate Marmite!

  8. Bloke in the Fourth Reich

    It should be none of the phone manufacturer’s damn business what software I want to run on my phone. It’s my phone, not their phone.

    Or any of their business what data I store on it.

    Wasn’t a lot of this “vertical integration” the subject of famous court cases throughout the last two centuries?

  9. “Tesco is not effectively a monopoly (unless it was the only store in a small town) unlike Apple’s app store which is the only way to distributes apps.”

    On Apple products…

    Which monopoly is easily avoided by… not buying Apple products.
    Side effects may be a full walltet and that warm feeling of not being a posing wanker.

  10. Bloke in the Fourth Reich

    Grikath,

    Indeed you can buy an Android, which it is possible with some knowhow to install software not from one of the built in stores.

    You still cannot stop the damn thing downloading and installing whatever software that Google wants to force on you though. If they want to force on you an Apple-style very very bad pr0n for which you ought to go to jail scanner that will report you automatically they can. If they want to force a covid distance app on you they will do it.

    And this is not pro very very bad pr0n, it is simply not Apple or anyone else’s business to pro-actively flip through the data of hundreds of millions of people on the off chance of finding some people doing very very bad stuff by today’s values of very very bad. Tomorrow’s values for very very bad will be different, as the last 3 years, let alone the last 30, demonstrate.

    The fact that Google have not (yet) done (quite as much) of this stuff as Apple is kind of beside the point.

    And yes, this same shit has applied to most desktop OS for aeons.

  11. Who on earth drives to a supermarket when there are six within a mile of his home? By the time one has negotiated getting in and out of the car park it is quicker to walk to the nearest Marmite stockist (and a *year’s supply* of Marmite isn’t too heavy to carry).
    [I do not count use of a mobility scooter as “driving”]

  12. @Bloke in Wales

    The wog will walk a mile to get Marmite and the septic will walk a mile to avoid it

    Given what you yanks laughably refer to as “beer”

    …and yankee vomit chocolate

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